The Cabinet has reached an agreement on next year’s budget. According to the demissionary Finance Minister Sigrid Kag, it is a “balanced package.” She wouldn’t say anything about the details of the package. These will be announced on Budget Day.
She did say that the budget is covered. But she couldn’t say whether everyone for whom poverty is threatening can breathe a sigh of relief. “I can’t look into everyone’s wallet.” However, the government has drawn up the budget “with an eye for” the lower incomes.
The budget will be submitted to the rest of the Council of Ministers for approval on Thursday. After Budget Day, the lower house of the Dutch parliament will debate it and make adjustments. That must happen according to the rules: adjustments must be financially covered. Kaag has often emphasized that the time of “free money” and automatic compensation is over.
On Wednesday, it was already leaked that 2 billion euros will go to better purchasing power for lower and middle incomes. That is paid for, among other things, by increasing the burden on companies and the highest incomes, a source said earlier. However, there would still be a gap of 300 million euros. Whether that gap will be closed with taxes or cutbacks, Kaag didn’t say.
The money will be used to increase the rent allowance and child-related budget, among other things. People are also less likely to have their social assistance benefits cut.
According to Kaag, the Cabinet reached the agreement in “a good atmosphere.” There was political tension within the Cabinet on whether there would be cuts or whether the burdens for companies and the rich would increase. The VVD, in particular, did not want large companies to pay for the costs, outgoing Economy Minister Micky Adriaansens said earlier. Kaag now only said that every political squadron of the Cabinet has given “color” to the budget.
Because this Cabinet has collapsed, there will be little new policy. Outgoing Cabinets are expected to be cautious about major expenditures. Yet, there will be money for poverty reduction. The Central Planning Office warned of sharply increasing poverty if the Cabinet did not intervene. Various poverty schemes would expire at the end of this year without action by the government.
Reporting by ANP