Caretaker Cabinet presents optimistic budget with 3,5% economic growth and national debt at 56,5% of GDP in 2022.
On Budget Day (known as ‘Prinsjesdag’), the third Tuesday of September, the Dutch government announces its plans and ambitions for the coming year. This year the cabinet has a ‘caretaker status’, following the childcare benefit scandal in January, when PM Rutte offered the resignation of his cabinet to the King. Due to a very long and complicated formation process, no new cabinet has been formed as of yet.
Later today, the minister of Finance (Wopke Hoekstra) will present the government budget for the upcoming year – called “Resilience and Building Onwards” – which will be followed by a cycle of parliamentary debates, lasting until the beginning of December. All budgets of all the ministries must be approved by Parliament and Senate by January 1st, 2022.
Key message from this year’s King’s Speech is that the Netherlands is doing well economically, which provides room to “build towards the Netherlands of tomorrow”. As the COVID-crisis had an enormous impact on the Dutch people and healthcare system, the government is working on a prevention plan for pandemics. Extra investments in building new houses, climate policy and security will help move the Netherlands forward. It’s also stated that the Dutch worry about the increasing polarization of public debates, but that they are a resilient people that still rate their lives positively.
Key elements of the King’s Speech & Government budget 2022:
- The economy is expected to grow by 3.5 percent next year. This equals last year – which is quite surprising (following the COVID-crisis).
- The government is counting on € 334.1 billion in revenues and € 353 billion in expenditures, yielding a budget deficit of € 18.9 billion.
- National debt wil decrease from 57,5 to 56,5 percent of GDP.
- Average purchasing power is expected to remain stable. An extra € 226 million is reserved for the lower income category to help stabilize purchasing power.
- Unemployment to fall below the number of vacancies for the first time in years.
- Despite the caretaker status of the government, a one-time amount of €6.8 billion will be allocated to climate policy, and used for the implementation of the climate agreement and investments in energy infrastructure.
- Annually, € 100 million will be invested in building new homes. Critics have already claimed this is nowhere near enough to tackle the Netherlands’ housing crisis.
- In the security budget, € 400 million is allocated for tackling subversive crime, € 154 million to social advocacy and another € 154 million to the “Protection and Security post.” These allocations follow the assassination of prominent crime-reporter Peter R. de Vries in the famous Taghi-case.
- Regarding defense policy, € 20 million is allocated to veterans and € 60 million goes to investments in ammunition and training of soldiers. This should increase the readiness of the armed forces.
- Meanwhile, € 8 billion will be allocated to lags in education due to the COVID-crisis, and € 1.3 billion will be invested in youth care.
- Although there is dire need for policy & budget for the current Dutch ‘nitrogen crisis’, the 2022 budget has no specific plans for this.
The full King’s speech (in English) can be viewed through this link.