UPDATE DUTCH POLITICS – Combating poverty on Budget Day

On Budget Day (known as ‘Prinsjesdag’), the third Tuesday of September, the Dutch government announces its plans and ambitions for the coming year. Traditionally, the King is first to present the plans in his annual King’s Speech (‘Troonrede’).

This year (yesterday – 19 September), the current caretaker Cabinet of Prime Minister Rutte presented its 2024 budget of a total of 433,6 billion euros, including a deficit of 30,7 billion euros. Key measures include a 2 billion euro plan to boost purchasing power and prevent more households from falling into poverty, and higher taxes for wealthier households and smaller businesses.

After yesterday’s presentation, a cycle of parliamentary debates will follow. The budgets of all ministries must be approved by the House of Representatives and the Senate, but it’s yet unclear whether this will happen before or after the upcoming national elections on 22 November this year.

Highlights of the King’s Speech & Government budget 2024:

Economy and Energy

• The government is committed to fostering sustainable economic growth through the National Growth Fund. Additionally, the Investment Subsidy for Sustainable Energy and Energy Savings (ISDE) will expand, benefiting homeowners and entrepreneurs looking to enhance sustainability.
• Entrepreneurs will enjoy an extension of the energy investment deduction by five years, now stretching to 2028. Beginning in January 2024, the energy investment deduction percentage will rise to 40 percent.

Care and Health

• In a bid to manage the burgeoning demands on the healthcare sector, the Dutch Cabinet is poised to implement improved healthcare organization strategies while simultaneously curbing demand through a strong emphasis on preventive measures.
• In the forthcoming years, primary care will pivot towards establishing a resilient and forward-looking system. In 2024, a substantial allocation of 89,5 million euros has been designated to augment the quality, accessibility, and affordability of primary healthcare services.
• On the international front, the Cabinet is actively exploring strategies to enhance control over medicine availability. Domestically, consultations with key stakeholders are underway to consider potential adjustments to health insurers’ procurement policies.
• Simultaneously, the Cabinet is conducting a comprehensive examination of government regulations, including the Medicine Pricing Act and the General Reimbursement System, aimed at improving the availability of medications for Dutch patients.

Defense

• Defense remains a priority, with a budget of 21,4 billion euros, equivalent to 1,95 percent of the gross domestic product. Although this falls slightly short of the NATO target of 2 percent, the Netherlands continues its support for Ukraine through equipment and training in 2024.

Education

• Education is a focal point, with 38,4 million euros set aside for enhancing brick-and-mortar online library networks, enabling municipalities to seek subsidies for new libraries and improved collections. Furthermore, 324,1 million euros are dedicated to bolster extracurricular activities and support for students, including homework assistance, technology training, and sports.

Housing

• A substantial 300 million euros will bolster municipalities in their efforts to expedite home construction and enhance affordability. Construction projects facing potential delays due to economic shifts can apply for increased Startbouwimpuls subsidies, now totaling 300 million euros.
• The rental allowance will surge by over 30 euros per month in January 2024, supported by a 750 million euro annual allocation.

International Relations

• With an eye on economic diplomacy, the government allocates 3,6 billion euros for foreign trade and development cooperation, aligning with the UN Sustainable Development Goals to maximize economic opportunities for businesses.

Poverty and Purchasing Power

• Several measures aim to combat poverty and empower citizens. Child budgets increase significantly, with up to 750 euros for the first child, 883 euros for the second, and 400 euros for children aged 12 to 17. Rental housing benefits, employment tax credits, and social assistance benefits all receive boosts. A total of 89 million euros will assist 6.500 households expected to fall below the poverty line over the next four years.

Security

• Over 4 billion euros are allocated to enhance the asylum procedure, including expanding reception places, municipal shelters, and facilitating returns for those ineligible to stay in the Netherlands. Additionally, 3,2 billion euros will compensate municipalities for providing emergency shelters for Ukrainian refugees. Enhanced security and youth protection initiatives also receive significant funding.

Traffic and Transport

• Infrastructure maintenance is a top priority, with 4,6 billion euros dedicated to the upkeep and renovation of bridges and viaducts. Investment in charging stations for vehicles and power points for ships will also be ramped up to promote sustainable transportation solutions.

The full King’s speech (in English) can be viewed here.