Prinsjesdag 2021: Dutch government reveals budget for coming year
Prinsjesdag 2021: Dutch government reveals budget for coming year
On Tuesday afternoon, the Dutch government announced the official budget for the coming political year. Thanks to coronavirus and the ongoing discussions to form a new cabinet, this year’s Prinsjesdag was relatively low-key - here’s everything you need to know about Prinsjesdag 2021.
Every year, the third Tuesday of September marks an important day in the Dutch political calendar, as the Dutch government reveals its annual budget and the King addresses the people of the Netherlands, looking back on the past year and turning his attention to what the future might hold.
This Prinsjesdag was a little trickier than usual: not only did the COVID-19 pandemic mean many of the typical ceremonial aspects of the day had to be either scrapped or reworked, but Prime Minister Mark Rutte’s ongoing struggle to form a cabinet makes it difficult for his outgoing ministers to implement any significant changes.
Speaking from the Grote Kerk in The Hague, King Willem Alexander gave his annual speech, highlighting the unrest and uncertainty the country continues to face but emphasising the fact that it "is and remains a good country to live in." He also mentioned a number of issues the Netherlands faces, namely the inaccessibility of the housing market, the climate crisis, and, of course, the COVID-19 pandemic, recognising that these uncertainties can lead many to question what the future might hold for them and their families.
The Dutch economy in 2021
The coronavirus crisis has placed significant pressure on the Dutch economy over the last year and a half, but figures show that the economy grew by 3,9 percent in 2021 compared to last year, meaning the situation has almost reached pre-pandemic levels. Predictions for next year are also looking good, regardless of whether or not further lockdowns are implemented, with the economy expected to grow by a minimum of 2,2 percent.
Unemployment has also remained at a relatively low level this past year, and the national unemployment rate currently stands at 3,4 percent. In 2022, this figure is expected to rise slightly to 3,5 percent.
With the coronavirus pandemic slowly but surely coming to an end, the government expects to halve the budget deficit over the coming 12 months. The deficit is expected to rise to 5,4 by the end of 2021, with the government planning on cutting it down to 2,3 percent next year, thanks to the fact that less money will be spent on implementing COVID-19 restrictions and providing financial aid to struggling businesses.
2022 Dutch governmental budget
Here’s a brief overview of the key announcements made on Prinsjesdag:
Income and taxes
In regards to the crucial topic of taxation in the Netherlands, the government announced a new tax-free "home work" allowance of a maximum of 2 euros per day for employees who would like to continue to work (part-time) from home. The government's Tax Plan package - which comes into effect on January 1 - also introduces a number of measures in an attempt to limit tax avoidance.
Salaries and wages can only expect a very minor increase in the next year, and inflation is set to increase over the coming months. The government has therefore announced minor steps to improve the purchasing power of individuals and couples, which should mean all households will see their purchasing power increase by an average of 0,1 percent in 2022.
It doesn't come as a huge surprise, but news from Prinsjesdag reveals the price of basic health insurance is expected to increase by 2,75 euros a month. In accordance with this, anyone eligible to receive healthcare benefits will see their monthly allowance rise. The healthcare deductible will remain at 385 euros.
When it comes to COVID-19, 2,1 billion euros has been earmarked by the Ministry of Health to invest in testing and vaccination infrastructure. All in all, a total of 100 billion euros will be invested in the Dutch healthcare system next year, 22 million of which will be put aside to prepare for any future pandemics (i.e. manufacturing the necessary tools and equipment, ensuring the availability of healthcare staff).
The government continues to face mounting pressure to tackle the national housing crisis, and this year once again sees significant funds invested in accelerating the development of affordable housing.
The controversial landlord levy for housing associations has also been cut, with the government reducing it by 30 million euros per year from 2022.
Earlier this year the cabinet announced that billions of euros had been put aside to compensate for the backlog caused by the coronavirus pandemic, and Prinsjesdag saw a further 60 million euros allocated to the teacher grant which covers the cost of additional training programmes.
The budget for universities and colleges has been increased by 645 million euros in order to cater to the growing number of students.
The government has allocated 6,8 billion euros to be used to implement new measures to tackle the climate crisis and cut CO2 emissions; for example, an additional 118 million euros will be used to subsidise the purchase of electric vehicles, and 514 million euros will go to a national insulation programme. In addition to this, next year the country plans to set aside 1,3 billion euros for the international fund for fighting climate change in developing countries.
Unlike last year, this year the government made no move to tackle the issue of nitrogen-related pollution and coal-fired power stations in the Netherlands. These issues have been left for the next government.
Crime and security
This Prinsjesdag sees the government set aside funds to fight crime, investing 100 million euros in national defence, and 400 million euros in local police forces, providing them with the resources they need to combat organised / subversive crime.
In order to limit the current chip shortage in tech, the government announced an investment of 300 million euros for the Dutch tech industry. The cabinet has also allocated a further 1,1 billion euros to resolve the childcare benefit scandal, bringing the total costs to 5 billion euros. Lastly, an additional 1,3 billion euros have been made available to municipalities.
Life in the Netherlands in 2022
Many uncertainties from 2021 appear as though they will follow the Netherlands into the new year, however, in regards to the coronavirus crisis, it seems as though the worst is over, meaning the overall outlook shows some optimism for the country in 2022.