Analysis on the debate on the state of the country and what the new measures mean for young people
To describe the current situation, one word suits particularly well: uncertain. No one knows exactly when the war in Ukraine will be over, if and when an economic recession will set in, and whether we will manage to meet the great challenges of our time in time on a global level. This uncertainty is particularly noticeable among the younger generation. The climate crisis, the housing crisis, the war, feminist uprisings in Iran – the many crises intensify the fears of young people in our country.
In his almost two-hour long speech, the Prime Minister talked primarily about those major crises. He pointed out the responsibility that the blue-red-green government has assumed with the over 2 billion worth of measures from two tripartite rounds.
But the speech was not limited to listing projects that had already been decided. New measures were also announced. And yet there remain many challenges to which the prime minister gave few or no answers in his speech.
A difficult solar boom
In recent years, renewable energies boomed in Luxembourg. Now, the government wants to further promote the expansion of solar energy on a massive scale. With the reduction of VAT on solar systems from 17% to 3%, an increase in premiums, a stable feed-in tariff, a solar obligation on new buildings and a new model in which private individuals can make their surface available to the state for solar energy, many green measures are being taken to make full use of solar energy in the future.
The potential is indeed enormous. In the city of Luxembourg alone, according to the figures of the Environmental Report 2020, up to 160% of the electricity consumption of the city’s private households could be covered by photovoltaics. For this to happen, all roofs in the capital that are rated “good” or “very good” in the solar cadastre would have to be equipped with photovoltaic modules.
However, at the municipal level there are currently still some hurdles. In many neighbourhoods of the capital, solar modules are not allowed to be installed if they are visible from a place accessible to the public. In other municipalities, too, outdated building regulations prevent people from becoming less dependent on fossil fuels. It is imperative that improvements be made here so that the measures announced by the government can actually have an effect.
Another factor that risks becoming an obstacle to the energy transition is the lack of qualified workers in the craft sector. Not only the expansion of solar energy, but also the switch to heat pumps and the necessary renovation of buildings to increase energy efficiency will thus be slowed down.
Those who had expected a clear announcement from the Prime Minister in that respect were unfortunately disappointed. We still don’t have a clear strategy to consistently tackle the shortage of craftsmen and -women. In the field of education, for example, it should be ensured that pupils get more insights into these professions already in primary school in order to promote their practical skills.
The decision to become a craftsperson should not be the result of previous academic failure, as is often the case today. On the contrary, pupils must be made aware from the very beginning of their school orientation that these are promising professions that offer many career opportunities.
Mobilisation tax: dead on arrival?
As promised a year ago, the government presented a property tax reform proposal, as well as a proposal to introduce a mobilisation and vacancy tax, just in time for the State of the Nation Address. The latter are intended to help mobilise more housing.
The mobilisation tax is intended to tax buildable land, thus creating an incentive for owners to mobilise the land for the housing market. Under the proposal, a tax deduction would apply to each child under 25 years of age. In the example provided by the Ministry of the Interior, this would mean that for a buildable plot of 6 ares in Mersch, the mobilisation tax after 10 years would be only €29 instead of €2,579.
In this case, the tax deduction would completely neutralise the incentive to build on the land. The question therefore arises whether this clause, which is supposed to benefit the younger generation, does not undermine the effectiveness of the tax right from the start. As a result, the tax might hardly contribute to solving the housing crisis. Yet it is the young adults of today, who are not lucky enough to be provided with a flat or a plot of land by their parents, who are particularly affected by the high housing prices.
Strengthen purchasing power
In addition to the tax measures in housing policy, the government also announced a significant increase in the tax credit for single parents. Furthermore, social welfare offices will see their staff numbers increased. According to the government, together with the social measures from the Tripartite, this should prevent that the current energy crisis turns into a new social crisis.
The government has failed to send a stronger signal to young people, for example by indexing student grants.
But young people are also affected by the current energy crisis. They also benefit from the energy price brake decided in the Tripartite. But young adults who cannot manage to work while studying do not receive any indexation of salaries. If they do get one, it is hardly significant in view of the mostly lower wages.
The government has failed to send a stronger signal to young people, for example by indexing student grants. This could have ensured that students would continue to be at least partially compensated for their loss of purchasing power in the future.
Take mental health seriously
In the area of mental health, too, one could have expected more from the prime minister’s speech. He did state that the taboo of mental illness had to be combated. However, considering that psychotherapeutic treatments are still not reimbursed by the CNS after 5 years of negotiations, this statement remains without substance.
The current crises reinforce the fears of the young generation. In view of the worsening climate crisis, climate anxiety in particular is on the rise. And although more and more people suffer from mental illnesses, they continue to be stigmatised. It is therefore necessary to draw more attention to mental well-being and to give mental illnesses the same status as physical illnesses, whether as a cross-cutting issue in education, in the organisation of working life or in access to psychotherapeutic services.
In addition to reimbursement of treatment costs, a right to telework 2 days a week could also be introduced in those professions where this is possible. This would enable many people to better reconcile work and private life. The time gained will allow for additional activities that promote mental well-being.
Facing the insecurity
The Prime Minister’s speech has shown some ways in which the government wants to make progress in the last year of the legislature. It is now important to implement these announcements quickly despite the approaching election campaign and at the same time to make improvements where necessary.
Especially in uncertain times, our country needs an ambitious executive that sets a clear direction and explains its actions to the citizens. Above all, political leaders owe it to the young generation to pursue policies that consistently address the challenges of our time, regardless of whether or not there will be elections in a year’s time.
Fabricio Costa and Amy Winandy are speakers of the Young Greens (déi jonk gréng).
First publication: Luxemburger Wort, 15.10.2022 (in German)
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