Counteracting poverty key theme of caretaker cabinet budget

Photo: Rijksoverheid/Valerie Kuypers via Wikimedia Commons

Purchasing power will go up by an average of 1.8% next year, boosted by €2 billion in extra government spending on alleviating poverty, according to a string of leaks about the outgoing cabinet’s 2024 budget.

The government is due to present its 2024 spending plans on Tuesday, although no major new policy measures are to be expected because the cabinet is currently in a caretaker role, ahead of the November general election. 

Nevertheless, as every year, parts of the budget have been widely leaked and reported, including the finance minister’s statement.

“Too many adults and children are living in poverty,” caretaker finance minister Sigrid Kaag is quoted as saying by broadcaster NOS. “They can barely pay their fixed costs, and have no money over for healthy meals or new clothes.”

The situation, the minister said, is “unacceptable”, and this is why the government is increasing its efforts to combat poverty. Without action, the number of people living below the poverty line would have risen to almost one million in a population of 17.6 million, the CPB warned last month

The measures include an increase in child benefits for the poorest families – €750 per year for the first child and €883 for the rest. Housing benefit will rise by €416 per year and, as reported earlier, the fund to help people pay high energy bills will also remain in place next year. 

“Most of this will be funded via redistribution, and people with high incomes will pay a little more,” Kaag said.

The government hopes to raise €1.6 billion by reducing the higher tax band slightly so that people pay the 49.5% upper income tax rate more quickly. The higher tax rate currently comes in on income over €73,000. 

Taxes on tobacco and alcohol will also go up, raising a further €100 million, RTL Nieuws said. 

The documents also suggest the Dutch economy is on target to grow 1.5% next year and that the national debt will fall further to just under 47% of GDP, well below the EU maximum of 60% and less than the CPB suggested in August. The budget deficit, however, will rise to 2.9%, which is still below the 3% EU limit, the NRC reported.  

According to the Volkskrant, hopes that the tax cut on petrol would continue will not be realized. Petrol will rise in price by 20 cents a litre next year as planned, taking the price of Euro95 to around €2.50 per litre. 

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