Prime Minister Mark Rutte’s fourth cabinet unveiled its 2023 budget on Tuesday. This includes €17.2bn, part of a total budget of €395bn, which will help boost his purchasing power by nearly 4%. This introduction will be followed by an overview of key points, specifically income, taxation, energy costs, healthcare, asylum, criminal justice, infrastructure, agriculture, and budget items related to Caribbean Netherlands. .
The Cabinet has to defend the budget with two parliaments, Tweede Kamer and Eerste Kamer. Political debates take place this week and are considered the most important of each year.
Still, revenues are expected to reach €366.4bn, well below expenditure levels. The spending deficit was calculated before the Cabinet announced plans for an energy price cap and other measures to help households cope with skyrocketing gas and electricity prices this year. Economic growth is expected to reach 4.6% this year and about 1.5% next year.
This will result in a temporary deficit of 3% of GDP next year, approaching the normal limit set by the EU.
income and household
- The minimum wage will be increased by 10.15% at once, rather than by 7.5% in three steps.
- The minimum wage for full-time workers is approximately 1,935 euros per month.
- Currently, the number of hours considered full-time is 36, 38, or 40 hours per week. The cabinet wants by 2024 to define a minimum wage that better accounts for the actual working hours of full-time employees.
- Social security and national pension linked to the minimum wage will also increase by 10.15%.
- The housing allowance increases by approximately 17 euros per month.
- Residents of low-income public housing will be able to receive a rent reduction of €57 per month from July 2023 instead of after one year.
- Households with child-related expenses will temporarily receive more money to cover their expenses. In 2023, the first child will be her €1,653, and each additional child she will earn him €1,532. This is up from her €1,220 in 2022, to around €1,000 for each additional child. The increase will be phased out for her through 2028.
- Single parents are entitled to an additional subsidy of €3,285 to €3,848.
- Childcare reimbursement remains at a maximum of 95%, but will increase to 96% by 2025.
- Higher education students who do not live with their parents are eligible for an additional subsidy of €165 per academic year from September.
- An estimated €35 million will be allocated to help higher education students who have difficulty paying their energy bills if they do not qualify for energy allowances for low-income households.
- The income tax rate on the first €73,071 of work income will be reduced from 37.07% to 36.93%.
- The tax on the fictitious return on assets declared in Box 3 will be increased to 31% on the 2022 income tax return. By 2025, it will increase by 1 percentage point each year to 34%.
- An estate of up to €57,000 will not be subject to taxation on fictitious earnings, an annual increase of €7,000, almost double the tax return over income in 2020.
- The employer tax credit will be increased to a maximum annual net amount of EUR 521.
- The self-employed tax credit will be reduced much sooner than planned. The deductible has been reduced from €6,310 to €5,950. Instead, it drops further to €5,030.
- The transfer tax on the purchase of housing for rent to tenants will be increased from 8% to 10.4%.
- First-time buyers under the age of 35 will not have to pay transfer tax when purchasing a home as their primary residence in 2023.
- Homebuyers aged 35 and over will continue to pay the 2% transfer tax on primary residences purchased in 2023.
- The gift deduction for the purchase of a home will be reduced from €106,671 to €28,947. This exemption will be repealed in his 2024.
- Passengers traveling by air will pay an air tax of between 8 and 26 euros per ticket.
- Only those who contest a fictitious return that applies to property on their Box 3 income tax return will receive compensation. This will cost him 3.6 billion euros.
energy and fuel costs
- Capping a percentage of household energy use would bring costs down to levels seen before the Ukrainian war caused gas and electricity prices to skyrocket. The reduced payouts will begin estimated in November and become fully effective in January. On average, you get a discount of €190 per month.
- Energy price caps apply to some small businesses.
- Low-income households will be able to claim an energy subsidy of €1,300 from local authorities.
- An emergency fund of €50 million has been set up to prevent households from delinquent energy bills.
- Household electricity and gas connections will remain active until April, even if customers are significantly behind in payments.
- Temporary reduction of excise duty on petrol and diesel will be extended until July 2023.
- From January, consumption tax will not be charged on the purchase of solar panels.
- The duty-free allowance for employee travel reimbursement will increase from 19 cents to 21 cents in 2023.
- Oil and gas companies will pay higher mining taxes worth an estimated €2.8 billion next year and the year after.
- The premium for the basic health insurance package will increase to a maximum of €137 per month, an increase of €11, representing more than 8%.
- Medical allowance cap increased to €154 per month
- A temporary additional medical allowance of €412 will be introduced only in 2023
- Tobacco tax will increase by €1.22 in April, bringing the price of a pack of cigarettes to around €9. Next year, it will rise by another €1.
- The tax on soft drinks will increase to 20 cents per liter in 2023 and to 23 cents in 2024.
- Soft drink tax will no longer apply to mineral water from 2024.
- An estimated €103 billion will be spent on healthcare in 2023, bringing the total to over €100 billion for the first time.
- Protection against rotavirus is added to children’s immunization programs.
- Around 30 million euros will be available this year to replace a nuclear reactor producing medical isotopes in Petten, North Holland. Next spring it will increase to 129 million euros. The current reactor is 60 years old for him.
- The Cabinet has allocated €1 billion to compensate students who are not eligible for basic research grants.
- Expenditure on higher vocational education will increase by another €150 million to €350 million.
asylum seekers and refugees
- About €2.6 billion will be allocated for housing arrangements and care for Ukrainian refugees.
- More than €1 billion will be allocated by 2027 to provide shelter and care for asylum seekers from other countries, integrate refugees and provide housing for refugees granted residency.
- The asylum process will be boosted by €145 million to improve living conditions in areas where asylum seekers are born, in order to reduce the need for asylum seekers in the Netherlands.
- Diplomatic spending will increase by tens of millions of euros to support embassies, human rights policies, Dutch citizens living abroad and Dutch entrepreneurs and companies operating abroad.
crime and prison
- About €40 million will be used to tackle organized crime. This he will increase to 100 million euros in 2025.
- A further €143 million will be used to prevent young people from participating in organized crime.
- The Cabinet will spend 20 million euros to combat drug trafficking at ports, airports and other logistics hubs.
- Prison and institutional system spending will increase to €70 million next year and to €210 million by 2026. This includes increased forensic medical spending.
- An investment of €34 million will be made in 2023 and another €24 million will be spent in 2024 to combat crime organized by prisoners.
- An estimated €2 million will be available for vocational training and education of prisoners.
infrastructure, agriculture, fisheries
- A total of €4 billion will be spent on infrastructure, including €2 billion for railway improvements, €1 billion for roads, €500 million for water management and €500 million for waterways.
- A total of €340 million will be allocated to make livestock farming more sustainable and reduce nitrogen emissions.
- More sustainable investments in fisheries are made, worth €181 million in 2023.
- Subsidies for greenhouse horticulture expenditure and energy efficiency will increase to €77 million.
€16 million will be allocated to improve the purchasing power of households on Bonaire, Saba and Sint Eustatius. This includes $1,300 for low-income households to pay their energy bills, an increase in public pensions of about $150 per month, an increase in child benefits of about $40 per month, a reduction in childcare costs of about $50 per month, and a taxable Income amount outside.
https://nltimes.nl/2022/09/20/2023-dutch-budgets-impact-wallet-highlights-cabinets-plan How the 2023 Dutch budget will affect your wallet and highlights of the Cabinet’s plans