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€2 billion to fight poverty, paid for by higher taxes and duty

September 19, 2023 Robin Pascoe
Sigrid Kaag presents what is probably her last budget to parliament. Photo: Phil Nijhuis ANP

The government’s spending plans for 2024 include little in the way of new policy because the cabinet is acting in a caretaker capacity and there will be a general election in November.

The aim of the budget, said finance minister Sigrid Kaag as she presented the holding plans to parliament on Tuesday afternoon, is to alleviate poverty among the country’s poorest families while paving the way for other reforms in the future.

The pending election “does not alter the fact that we have a responsibility to strive for a good life for all,” she said. “We will take the necessary steps until a new cabinet takes office. That is why we have put together a balanced budget with an eye for the vulnerable in society.”

Kaag pledged the government’s continued support for Ukraine and emphasised that the “future of the Netherlands is European”.

The Dutch economy, she said, remains one of the most competitive in the world. We are still a “high trust society”, the minister said.

At the same time, she said politicians have a major joint responsibility in terms of climate change and the energy transition. But plans for phasing out subsidies on the use of fossil fuels, she said, will be up to the next government.

MPs will debate the budget during two days of debate on Wednesday and Thursday. It will be the last time prime minister Mark Rutte defends his government’s budget in what will effectively be the start of the election campaign.

Most of the measures leaked out earlier.

The main points

Taxes

  • The higher tax band (€73,000) will rise by 3.55% rather than inflation
  • Untaxed travel expenses to rise from 21 to 23 cents per kilometre
  • The tax rate on increased assets will rise from 32% to 34% and the tax-free limit will remain €57,000
  • From April, a packet of 20 cigarettes will cost an average of €10.70, while 50 grammes of rolling tobacco will hit €24.14
  • Taxes on alcohol will rise in line with inflation

Economic developments

  • Economic growth to hit 1.5% (was 0.7% this year)
  • National debt to fall to 47.3% of GDP
  • Budget deficit to rise to 2.9%
  • Unemployment rate to rise from 3.6% to 4%
  • Read the full economic forecast (in English)

Other measures

  • €64 million extra for sheltered work schemes
  • €89 million to help new arrivals stream into Dutch higher education
  • €168 million to continue the free school meal scheme
  • The foreign aid budget will go down from €4 billion to €3.6 billion as more funds are shifted to deal with asylum seekers at home
  • €112 million extra for crime prevention
  • €4 billion to manage the influx of new arrivals more effectively and boost refugee centre capacity to 41,000.

Read the government’s budget document summaries in English.

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