Luxembourg is more than prepared to respond to the heat, Pirate MP Marc Goergen said in an interview on RTL on Thursday. Nevertheless, he questioned the way primary schools are run across the country.
The Pirates, he said, are not defenders of municipal autonomy like other parties, and primary schools should become more of a national competence overall. The heatwave, he argued, has shown once again that some municipalities are well equipped while others are not.
There is a patchwork of measures, the result of which is that even the Ministry of Education no longer has a full overview, Goergen said. Education Minister Claude Meisch ruled out a national heat-related school closure in an interview with RTL on Wednesday, arguing that parents would no longer be able to get to work in that case.
The Pirate MP countered that this was in fact the problem, and that the party would therefore argue for a window of time in which parents could stay home with their children and be paid for it by the state.
Goergen also spoke in favour of air conditioning. In his view, units are not bad for the environment and can even be climate neutral if connected to a solar installation on the roof. Even before the heatwave, the government had announced a series of measures to support the energy transition further, prompted by the US-Israeli war and the rise in oil prices.
They include the extension of pre-financing for photovoltaics, already announced, to heat pumps and electric vehicles. These measures were all very good, the Pirate MP said, although he felt they had come too late, now that oil prices had eased back again. Goergen also warned that subsidies could not be overdone.
According to the MP, the tripartite package agreed just over two weeks ago was well calibrated, since Luxembourg could count on additional revenue, in particular from fuel tourism. Goergen especially welcomed the adjustment of the tax scale to take an index tranche into account, since his party is in favour of automatic adjustments anyway.
Asked whether it was right that gross monthly salaries of over €10,000 would now get back €24, he replied that it was not a question of those earners receiving something extra, but of them having paid too much in the first place.
The Pirates are generally against tax rises. In order to create more fairness and prevent the gap between low and high incomes from widening further, the party advocates capping the index.
Under its model, for instance, from €10,000 gross per month upwards, recipients would no longer receive a 2.5% index tranche, but rather a flat amount of €250. He pointed out that the index basket consists particularly of food and energy prices. Someone earning €20,000, he argued, would not see prices rise so much that they would need €500 via the index. The figures he cited were examples, he added, and would in the end have to be discussed calmly and set together with the social partners.
Pressure on wages and strengthening purchasing power, the MP said, largely boils down to how hefty housing costs are in Luxembourg, which is why the Pirates have been advocating for specific tax for years. When asked about the Pirates' proposal that landlords who charge less than the market rent should pay less tax and whether this had not already been the case, Goergen replied that the question conflated two different things. The Pirates' proposal targets the tax rate, not tax overall.
To illustrate the idea, he took the example of a flat that would rent for €2,000 euros according to the rental price index, a figure the tax administration already has on file. If the owner chose to rent it out for €1,500 or €1,200 instead, in order to help someone, they would pay three times less tax than under the normal rate.
Conversely, if the owner wanted to make more money and pushed the rent up to €2,500 or €3,000, they would pay three times as much. The point of the proposal, he explained, was to adjust the rate depending on whether the rent sat below or above the rental price index, which made it something quite different from the formula in place today.
With that mechanism, Goergen said, the Pirates assumed that prices would come down, because landlords would have more to gain from setting a lower rent. There were two sides to the same coin, he added, with a winner and a loser, and the loser would be the state. He conceded as much, but argued that the trade-off had to be worth it for the state, accepting some loss in tax revenue so that families could afford to live in the country again.
To sum up his thoughts, the Pirates would take rental income out of normal income and then set the rate according to the rent, which could make it attractive to let to a family at a lower price. That, he said, would be a major reform.
The MP said the Pirates had not yet tabled a corresponding bill, but motions in that direction had been repeatedly turned down in recent years. The same went for their proposal that rent should be tax-deductible. When they were in government, he noted, the Luxembourg Socialist Workers' Party (LSAP) had opposed the idea. Now that they were in opposition, they had put forward the same proposal, Goergen said.
