The domestic budget leaves little room for extra expenditure, but the Cabinet still wants to come up with a package of measures to prevent the poorest people in the Netherlands from being unable to pay their bills. Caretaker Prime Minister Mark Rutte said on Friday after the regular weekly Council of Ministers meeting that he wanted to at least limit the decline in purchasing power for those households with the lowest incomes.
Rutte does not want the picture painted by the Netherlands Bureau for Economic Policy Analysis (CPB) to become a reality, which may require additional intervention. The CPB not only emphasized that a million people risk ending up in poverty if the Cabinet does not intervene, but also that the budget deficit is already increasing.
In his first press conference after a summer break, the prime minister would not reveal the source of funding for the extra package of measures, which could cost billions. To prevent the Cabinet from having no access to a financial buffer in the future, new purchasing power policy should be paid for by cutting back on other expenditures or by increasing the burden faced by others, like businesses.
Caretaker Minister of Finance Sigrid Kaag said on Friday that the budget deficit should not be allowed to increase further due to expensive measures. The Cabinet has already explored all boundaries, according to the minister. Moreover, the high interest rates and low gas revenues are hitting the treasury hard. According to Rutte, there are many “knobs to turn,” but he did not want to say what the Cabinet’s options are.
The fact that households with slim wallets will see their purchasing power fall sharply next year if no additional measures are taken is mainly due to the fact that many crisis schemes will expire starting on January 1. Rutte would not say whether these arrangements will simply be extended. This is “a very broad package,” he said about it. There are many options to ensure that people have more to spend in other ways.
This week, the CPB joined the Social Minimum Commission set up by the government. This committee, which has examined the minimum subsistence level, recommended at the end of June that social assistance and the minimum wage should be increased to ensure that everyone can make ends meet. This would require a package of around 6 billion euros. The question is whether the government can disburse that much money. State Secretary Marnix van Rij for tax policy thinks that is “very substantial,” he said on Friday.
Next week, the Cabinet will start negotiations on next year’s budget. This will be presented on Prinsjesdag, held annually on the third Tuesday in September.. Because the Cabinet has fallen, the budget will contain few new plans outside the purchasing power package.
Reporting by ANP