What is changing in the 2019 Dutch governmental budget?
On September 18, Prinsjesdag took place in the Netherlands and the government’s budget plans for the coming year were revealed. Here are the most important budget changes for government spending next year.
2019 annual Dutch governmental budget
Take a look at the governmental budget plans for next year in a nutshell. The most important changes have been addressed.
How is the Dutch economy doing?
The Dutch economy is doing well and next year it is expected to grow by 2,6 percent. The governmental debt will decrease to below 50 percent for the first time since 2007, and there is more good news, as unemployment will drop to the lowest it has been since 2001, namely 320.000 people.
This year, 355.000 people were unemployed, but by dropping to 320.000 next year, the number of unemployed people will have halved since 2014, when unemployment reached a peak of 700.000 people. Purchasing power will increase next year on average by 1,5 percent and, according to the government, 96 percent of the population will profit from this, with households having an average of 500 euros extra per year to spend.
Healthcare in the Netherlands
Healthcare is one of the three areas receiving the most budget at 71 billion euros, five billion more than this year. This money will be used to expand what is covered by the basic healthcare insurance package and cover the costs of higher prices and wages. A further 8,7 billion euros will go towards sports, well-being and the healthcare allowance benefit.
More money has been allocated to improve the quality of care for the elderly in 2019 and 29 million euros has been budgeted to combat loneliness, as over half of those above 75 years of age report feeling lonely.
As already leaked, health insurance premiums will increase by a little over 10 euros per month. To keep healthcare costs under control, the Dutch government will be making deals with hospitals, GPs, district nurses and the Dutch Association of Mental Health and Addiction Care (GGZ).
One important change next year is the increase of the lower VAT rate from six to nine percent. This means that a shopping trolley full of groceries, which would come in at 100 euros this year, will be 2,83 euros more expensive next year.
Additionally, households will pay more for the use of gas, whilst the cost of electricity use will decrease. Another change in taxes is the adjustment to tax brackets. Currently, the Dutch tax system uses three tax brackets.
In 2019, income which falls in the first bracket will be taxed at 36,65 percent. Income that falls under the second and third bracket will be taxed at 38,1 percent and 51,75 percent respectively. These changes precede a two-tax-bracket system, taxing income at 37,05 percent and 49,5 percent in brackets one and two respectively, which should be in place in 2021.
The construction of housing in the Netherlands needs to be sped up, as there are about 75.000 new houses needed yearly. Almost 40 million euros has been set aside for the construction of housing on old industrial estates and around old harbours.
Next year, education, culture and science will receive 38,5 billion euros, the third highest amount in the governmental budget. Primary education will receive hundreds of millions of euros to raise salaries and lower work pressure.
The first two years of tuition fees for the teacher training programme will be halved. Science will get 248 million euros extra, as this sector contributes to economic growth.
In order to cover the costs that may come with Brexit, the government is reserving hundreds of millions of euros. These reserves will be used to cover customs costs and the preparations of the military police and The Netherlands Food and Consumer Product Safety Authority, amongst other things.
Unfortunately, the budget plans made no mention of whether or not there would be a transitionary period for those receiving the 30% ruling, which will be shortened from eight to five years per January 1, 2019.
The Netherlands next year
So, there you have it, some of the important budget plans that will be put in place next year. Of course, if you want to take a look at all of the budget plans for 2019, you can visit the Dutch government’s website.