Dutch government sets aside 2 billion euros to boost purchasing power
With Prinsjesdag right around the corner, sources from The Hague have confirmed to RTL Nieuws that the cabinet’s budget for 2024 is almost complete. The plans include investing 2 billion euros in combatting poverty in the Netherlands and boosting the purchasing power of low- and middle-income earners.
Rutte’s caretaker government preparing for Prinsjesdag
Mark Rutte and his cabinet may have resigned in July, but ahead of the general election in November, the government is still required to put together a budget for the new year. While the caretaker government cannot take any action with regard to larger, more controversial policy, Finance Minister Sigrid Kaag is currently in the process of finalising the details of a budget for 2024, which will be revealed in full on Prinsjesdag on September 19.
Some aspects of the cabinet’s plan have already been released to the Dutch press; on Wednesday, RTL Nieuws reported that the “budget for 2024 is almost ready,” and - like last year - involves a number of key policies designed to combat poverty and boost the purchasing power of families and individuals earning lower salaries.
A report published by the Netherlands Bureau for Economic Policy Analysis (CPB) earlier this month revealed that the number of people living in poverty will rise from 4,8 of the population in 2023 to 5,7 percent - or approximately 1 million people - in 2024 largely as a result of a high inflation rate if the government failed to take action.
Cabinet investing billions to combat poverty in the Netherlands
According to RTL Nieuws, 2 billion euros is being set aside to increase the healthcare allowance and rent benefit, as well as a “child-related budget” for low- and middle-income earners. “Just about everyone” is expected to profit from these changes, although “the lowest incomes in particular benefit greatly from the government’s plans.”
If these plans go ahead, the government should succeed in improving the purchasing power of low- and middle-income households by around 2 percent in 2024. How the government will fund these policies remains to be seen, although ministers are reportedly considering an increase in tax on company profits and an adjustment to the income tax brackets.
Higher tax rates on cigarettes and petrol
In addition to providing financial support for struggling households, the government is due to increase excise duties on cigarettes and tobacco products from April of next year. This means that from next spring, the price of a packet of 20 cigarettes will rise by 1 euro, which should in turn yield around 90 million euros a year for the government.
Another issue that could be addressed in Kaag’s final budget is the excise duty on fuel. This summer, figures revealed that increases in excise duties for petrol and diesel would raise the price-per-litre by 21 cents and 13,5 cents respectively from January 2024.
Thumb: Jeroen Meuwsen Fotografie via Shutterstock.com.