This is what the 2020 Dutch governmental budget has in store for you
The 2020 Dutch governmental budget
Before we get started on the main points of the latest governmental budget, how is the Netherlands actually doing economically? Well, to answer this question, the country is doing pretty well. 2020 is expected to be the seventh year in a row showing economic growth, albeit less than in previous years.
Whilst there is slightly less growth than in other years, the percentages, 1,8 for this year and 1,5 for 2020, are normal for the Netherlands. The national debt is also expected to decrease to less than 50 percent of the GDP. This is not yet the level that it was at before the crisis, however, it does mean that the Netherlands is better able to deal with economic setbacks.
Main budget points
The 2020 governmental budget (Miljoenennota 2020) is a 71-page-long document, so to save you the trouble of reading through it all, we’ve summed up some of the main points for you.
Income and taxes
In 2020, purchasing power will increase for the majority of households. This year purchasing power is expected to rise by 1,2 percent and next year by 2,1 percent. Those in employment will experience the biggest boost in purchasing power, namely 2,4 percent. Entrepreneurs won’t be left out either, with an increase of two percent.
One maxim of the Cabinet is that working should pay off. Various measures have therefore been taken to lower income tax and indeed make working more rewarding. To this end, the general tax credit and employed person’s tax credit will be increased. Say you earn 25.000 euros per year, you’ll be 380 euros better off in 2020. If you earn 45.000 euros, you’ll have an extra 640 euros to spend. Of course, whether or not you actually benefit from those extra euros depends on changes in your personal situation and developments in the economy.
Another change is the reduction of the tax break for freelancers to 7.030 euros. This will then be further reduced until it has reached 5.000 euros by 2028. Freelancers won’t notice this next year when it comes to what’s in their wallets, as the employed person’s tax credit will increase.
Families benefit greatly from the new budget plans, as next year, child budget benefits will increase and more families will be eligible for it. As for energy tax, in 2020, a household with average usage will pay 100 euros less in tax on their energy bill. What your bill ends up being is dependent on the development of the energy prices.
As with this year, own risk (eigen risico) will stay at 385 euros. Definite premiums for health insurance in the Netherlands have yet to be announced - health insurance providers have until November 12 to make these public - however, the government seems to think these will increase by three euros a month. To combat this, healthcare allowance will increase by 67 euros a year for single persons and 95 euros per year for multiple person households.
Health expenditure as a whole will increase next year, with money going towards the increasing costs, wage increases, child services and nursing homes, amongst other things.
In an effort to curtail the shortage of teachers, the government is making 21,2 million euros available for those getting into teaching from a different field and 270 million for the raised salaries in primary education. Additionally, five million euros has been budgeted to stimulate diversity in science and 170 million euros has been set aside for early education to prevent toddlers from lagging behind.
When it comes to studying in the Netherlands, just like in 2019, students will only pay 50 percent of tuition fees for their first study year. For those who are studying to become teachers, this discount applies to both their first and second year of study.
In order to stimulate the building of accommodations, the government is making two billion euros available, one billion of this a government contribution to build houses in shortage areas. This money is also to ensure that starters and those with a median income can find a place quicker.
The threshold for social housing will increase to 42.000 euros for a multiple person household but decrease to 35.000 for a single person household. Those who earn too much whilst in social housing will be subject to rent increases of 50 to 100 euros a month.
Plenty more plans
So, there you have it, plenty of changes coming up in 2020, most being surprisingly pleasant. Of course, we haven’t covered every single thing in the budget plan. The Dutch government has laid out many more plans regarding tackling climate change, investing in new technologies and strengthening cybersecurity, amongst other things. Feel free to read the Miljoenennota online.