The Dutch government’s 2023 budget and what it means for you

On the afternoon of Tuesday, September 20, the Dutch government announced the official budget for the coming political year. Here’s everything you need to know about Prime Day 2022 and what Budget 2023 means for you.

Princess 2022

Every year, the third Tuesday of September marks a key date in the Dutch political calendar in The Hague, when the government announces the next year’s budget and King Willem-Alexander officially opens the next parliamentary season in the Netherlands. After two years of rather low-key celebrations, 2022 saw a return to more traditional customs that go hand in hand with Prinsjesdag (“Prince’s Day”).

Delivering his annual speech at the Koninklijke Schouwburg, the Dutch king stressed how worrying he found it to be that more and more people were struggling to pay their bills, adding that everyone was living in “a time of contradictions and uncertainty”. King Willem-Alexander also addressed the growing sense of mistrust among the general population, especially towards the Dutch government and political system. “It is alarming that people in a developed democracy are losing faith in the government,” he said.

The King also mentioned a number of “social and environmental constraints” that “our current way of life” continues to face, namely the housing shortage, the child care benefit scandal (toeslaganaffaire), continued decline in purchasing power and lack of housing for refugees.

The economy of the Netherlands in 2023

“The economic outlook for 2023 is uncertain due to large fluctuations in energy and commodity prices, as well as rising inflation,” the government said in a statement on its website, highlighting the impact of the ongoing war in Ukraine on prices in the Netherlands and the cabinet. . expects prices to continue rising in 2023.

The economic forecast highlights that it is “difficult to say how the economy will develop”, but the government expects the Dutch economy to grow at a slower pace in 2023. “Economic growth of 1.5 percent of the gross national product is expected,” the forecast says. , “But because of the uncertainty in the world, things can turn out differently. It is also possible that economic growth will stop.”

This Prinsjesdag, too, the government focused on the labor crisis, as job vacancies continue to outnumber job seekers. The cabinet hopes that better working conditions and higher wages will help solve this problem in the new year.

The Dutch government budget for 2023

In total, the cabinet plans to spend 395 billion euros next year. Here’s a quick overview of the main announcements made on Prinsjesdag:

Income, taxes and purchasing power

To compensate for the rising cost of living, the Dutch government is investing 17.2 billion euros in measures aimed at increasing the purchasing power of citizens and residents. These measures include:

• A higher minimum wage – The Dutch minimum wage will rise by 10 percent, affecting pensions and a number of other benefits, including child benefit, rent benefit (plus €16.94 per month) and health care benefit (plus €412).
• Lower income tax – Employees in the lowest tax bracket will have their income tax rate reduced by 0.11 percentage points next year.
• Higher taxes on wealth and business – The wealth tax, as well as corporate taxes and the mining levy (a tax aimed at the profits of energy companies) will be increased from January.
• Higher transfer tax — The transfer tax for the sale of business facilities, as well as tax rates for landlords, will increase.
• Higher tax credit – The employment tax credit for people working in the Netherlands will increase.
• Higher student scholarship – Students living away from home will be entitled to an additional 165 euros per month.

Measures to combat the rise in energy prices

In addition to the above-mentioned measures aimed at increasing purchasing power, the Dutch government is taking a number of measures to combat the high cost of energy:

• Reduction of taxes on fuel and energy — The government has extended the reduction of taxes on fuel and energy resources at least until June 2023.
• Energy allowance – Low-income households will again be eligible for a €1,300 energy grant to help cover utility costs.
• Restriction of energy prices – The government and the energy companies have agreed on limiting energy prices. The price cap will apply to the first 1,200 cubic meters of gas and the first 2,400 kilowatt-hours of electricity and will be in effect at least until the end of next year.
• Lower electricity bills — Until the price cap is fully operational, it will be introduced in installments from November 1, that is, until the end of 2022, households should feel the benefits.

According to calculations by the Netherlands Economic Policy Analysis Bureau (CPB), these measures should increase the purchasing power of households by an average of 3.9 percent in the new year. The Cabinet of Ministers expects that limiting gas and electricity prices will save households an average of 2,280 euros per year.

Health care

The government confirmed on Tuesday that the cost of health insurance will increase by around €11 a month from January, according to rumours. Although this figure is only a guideline set by the government, it is widely believed that policyholders will not deviate from the figure.

To better protect young children from rotavirus, the government is investing €15.4m in a new scheme as part of the national vaccination programme, which will give children a drink to prevent them from becoming infected.

An additional €280 million will be invested in care for the elderly, while €90 million is earmarked for mental and physical health. Once again, the government is setting aside funds (€5.2 billion) to cover measures taken to contain the spread of the coronavirus and ensure the country is better prepared for any future pandemics.

Housing and infrastructure

The Cabinet continues to work towards a target of 900,000 new homes by 2030, two-thirds of which will be affordable. In total, about 11 billion euros have been allocated for this project.

€300 million is also being allocated to help households cover the costs of keeping their homes properly insulated, and from July 2023, around 510,000 low-income families will be entitled to a rent reduction of an average of €57 per month.

4 billion euros will be invested in the maintenance of roads, waterways, water management and railways.

education

In an attempt to tackle the apparent decline in the quality and productivity of primary and secondary education, the government is investing €1 billion in improving the quality of education, €1 billion in tackling educational inequality and €800 million in training. training and hiring teaching and support staff.

A further €1 billion has also been set aside to compensate students who have accumulated debt under the current student loan system.

The climate

The government will continue to invest in various climate policies with the aim of working towards a “sustainable, fossil-free and circular Netherlands by 2050”. Funds are earmarked to cover the costs of transitioning to more sustainable and renewable energy sources (ie wind and hydrogen), as well as the construction of new nuclear power plants.

Crime and security

€100 million has been allocated to invest in measures to prevent vulnerable young people from committing crimes. Another 100 million euros will be invested in improving the fight against drugs in the country.

Defense spending will be increased to 2 percent of gross domestic product (GDP), which is roughly €5 billion.

Various

The Netherlands allocates almost 4 billion euros for humanitarian and military aid to Ukraine, as well as for the reception of Ukrainian refugees in the Netherlands.

Between 2023 and 2027, an additional €1 billion has been earmarked for the reception and support of refugees seeking asylum in the Netherlands during the crisis.

In 2023, the royal family’s annual budget will increase again, with King Willem-Alexander, Queen Maxima and Princess Beatrix receiving around €450,000 more for their income, as well as staff and material costs. Princess Amalia has said she will give up her income while she goes to university. 880,000 euros were also allocated to cover the costs of the flight of members of the royal family.

Life in the Netherlands in 2023

As the Dutch government and King Willem-Alexander have emphasized, the social and economic outlook for the new year remains uncertain. It is hoped that the cabinet’s move to boost purchasing power will successfully support the finances of households and families across the Netherlands.

However, members of the opposition have already spoken out against the plan, with Geert Wilders, leader of the Party for Freedom (PPV), arguing that ministers have waited too long to act. Similarly, GroenLinks leader Jesse Claver criticized the cabinet for putting together so many details at the last minute.