2023 budget: How the Dutch government plans to tackle the cost of living crisis

2023 budget: How the Dutch government plans to tackle the cost of living crisis

Ahead of Prinsjesdag later this month, Prime Minister Mark Rutte and his cabinet ministers have reached an agreement regarding a package of measures designed to boost the purchasing power of people living and working in the Netherlands. Here’s what we know so far about what the Dutch government is planning for the next budget. 

Dutch government agrees on plan to boost purchasing power

With Prinsjesdag - the day the government officially announces its budget for the coming year - fast approaching, the coalition parties sat down on Monday afternoon for what turned out to be a 14-hour meeting to settle on what the next budget would look like. Top of the agenda was purchasing power. 

Recent weeks have seen the government face mounting pressure to tackle the growing cost of living crisis and rising rate of inflation. Figures released earlier this week by European statistics office Eurostat show that inflation in the Netherlands rose to 13,6 percent in August - a new national record. 

As food, energy and fuel prices soar, more and more people in the Netherlands are struggling to make ends meet. The government hopes the following measures will help citizens and residents manage the rising prices. 

What will the Netherlands' 2023 budget do to help?

Sources in The Hague report to RTL Nieuws that, from January 1, 2023, the following measures will come into effect in order to help boost purchasing power:

  • Higher minimum wage - Sources report that the Dutch minimum wage will go up by 10 percent, which will also affect pensions and a number of other benefits
  • Tax cuts on fuel and energy - As was introduced earlier this year, the government plans to extend the tax cuts on fuel and energy until the end of June 2023.
  • Energy allowance - Like this year, low-income households will be eligible for a 1.300-euro energy allowance in 2023 in order to help cover the costs of utilities.
  • Higher benefits and allowances - The government has agreed to raise the child benefit and rent allowance, as well as the healthcare allowance to help those earning lower salaries. 
  • Lower income tax -  Workers that fall into the lowest tax bracket will see their income tax rate fall next year, and losses in revenue will be made up by higher wealth taxes, corporate taxes, and a higher mining levy (a tax targeting the profits of energy companies). 
  • Higher tax credit - The labour tax credit for people with jobs in the Netherlands will increase.
  • Higher student grant - Students living away from home will be eligible to receive more money via the government’s student grant system. 
  • Higher transfer tax - The transfer tax on the sale of business properties will increase, as will the tax rates for landlords. 

All in all, the so-called purchasing power package is expected to cost the government almost 16 billion euros, with all measures coming into effect next year. The government has already faced criticism for failing to act sooner, but the cabinet argues it’s too difficult to implement any real structural changes in time for the end of 2022. 

The source speaking to RTL Nieuws called the government’s plan an “unprecedented package of both temporary and structural measures” that the cabinet should be “proud of.” All the details of the official government budget will be announced on Tuesday, September 20.

Victoria Séveno


Victoria Séveno

Victoria grew up in Amsterdam, before moving to the UK to study English and Related Literature at the University of York and completing her NCTJ course at the Press Association...

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