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The 2016 budget: what you need to know

The third Tuesday in September has been celebrated with the pomp and circumstance that usually surrounds the announcement of the annual Dutch budget.

A day of tradition

The events surrounding the presentation of the 2016 Dutch budget were, as always, steeped in ritual and tradition.

This year, Prinsjesdag included the procession through The Hague of King Willem-Alexander and Queen Maxima in the Gouden Koets (golden carriage), a humble but historic suitcase used to carry budget documents, and the King’s second Troonrede (speech from the throne).

The King’s speech

In his speech, King Willem-Alexander gave attention to the current instability beyond Europe caused by war and jihadism, and how the Netherlands must avoid the polarising effects these conflicts can have on Dutch society.

To deal with such threats an extra 220 million euros will be made available to the Dutch armed forces in 2016 to improve security and prevent attacks, with additional funding to follow.

The King also highlighted the current state of the European Union, and how the Greek situation and British referendum on EU membership will have an impact during the temporary Dutch presidency of the EU in 2016.

Willem-Alexander concluded by discussing the refugee crisis that Europe is currently facing, mentioning the necessity for "tough choices" to limit the flow and create a better distribution of migrants across EU member states, in cooperation with the EU, NATO and allied countries.

Budget leaks

2015 saw a new watermark in budget leaks, with details of the government’s 2016 Miljoennota, or budget memorandum, being leaked to the press as early as August 28.

The Friday before the budget announcement the entire memorandum was publicly leaked - despite being distributed under embargo to all parliamentary party leaders - allowing for few surprises on the day itself.

Last Friday even the government’s communication strategy was made public, leaving Prime Minister Mark Rutte less than impressed.

Cautious optimism

In his forward to the budget memorandum, Minister of Finance Jeroen Dijsselbloem described the Dutch ecomony as "performing better than expected, but not well enough".

However, with an economic growth forecast of 2,4 percent in 2016, the Dutch economy is finally expected to return to pre-crisis levels, giving tentative "reasons for optimism."

Additionally, Prime Minister Rutte declared that Dutch economy had not looked so good in years, but that a realistic outlook was still necessary.

"We're back in the leading group in Europe. For that we should thank the Dutch and the entrepreneurs who refused to throw in the towel. At the same time we must remain realistic."

"Unemployment is still too high, various reforms must be properly and carefully carried out and we are dealing with a troubled outside world. Foreign conflicts can have an impact on our society. We must not close our eyes to this," the prime minister said.

2016 budget highlights

Main points of the 2016 budget memorandum are:

Economic figures for 2016

Expected economic growth of 2,4 percent.

The budget deficit will stand at 1,5 percent (of GDP) compared to 2,2 percent in 2015.

Unemployment rate expected to fall to 7,6 percent.

The EMU debt (general government consolidated gross debt) is expected to drop to 466 billion euros or 66,2 per cent of GDP.

Taxes

The government is providing income tax cuts to the value of 5 billion euros, intended to stimulate economic growth and assist people looking for a job by creating 35.000 extra roles.

The second and third income tax brackets will each be reduced by two percentage points, allowing employees to retain more of their gross salary.

The general tax credit (algemene heffingskorting) will be phased out.

Spending power for working people will increase by an average of 1,4 percent.

The tax-free limit for assets in Box 3, such as savings and shares, will be raised from 21.330 to 25.000 euros in 2016.

Families

The childcare allowance (kinderopvangtoeslag) will be increased.

 From 2017, paternity leave for fathers will be extended from two to five days.

Health care

The health insurance premium will increase by 7 euros to an average of 103 euros per month in 2016 (an increase of 85 euros per year).

The health insurance eigen risico (out-of-pocket) amount will increase 10 euros to 385 euros in 2016, due to higher health care costs.

An extra 210 million euros will be allocated in coming years to improve services in aged care and nursing facilities (verpleeghuiszorg).

The healthcare benefit (zorgtoeslag) will be increased by roughly 71 euros to help eligible people pay their health insurance premiums.

Housing

 The National Mortgage Guarantee (NHG) - designed to cover residual debt if a house is sold at a loss - will be reduced from 245.000 to 225.000 euros from July 1, 2016.

People (aged between 18 and 40) wanting to buy a house can receive a contribution from relatives of up to 100.000 euros tax-free (schenkbelasting) in 2017.

Refugees

An extra 539 million euros will be allocated to the Centraal Orgaan opvang asielzoekers (COA) to assist with the increase in asylum seekers.

A new permanent family facility will be created in Zeist.

110 million euros will be contributed to improve refugee care and shelter in countries neighbouring Syria.

Other

Defence spending will continue to receive extra annual funding, including 220 million euros in 2016, increasing to 345 million euros in 2020.

An extra 150 million euros will be made available for startups and innovative businesses.

King Willem-Alexander will receive a pay rise of 43.000 euros, Queen Maxima: 17.000 euros and Princess Beatrice: 24.000 euros, in line with the salaries of officials.
 


Coverage of the 2015 Prinsjesdag parade and speech from the throne by NOS broadcasting service.
Sources: NRC, Volkskrant

Beatrice

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Beatrice Clarke

Beatrice is a native Melbournian who moved to the Netherlands in 2009. With a background in independent publishing and fashion, Beatrice honed her understanding of Dutch language and culture working...

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