Finance Min: Netherlands emerging from crisis stronger; reveals 2016 budget
The Netherlands is emerging from the crisis stronger. Things are going better than expected, but still not good enough, according to Finance Minister Jeroen Dijsselbloem while presenting the Budget Memorandum to the Tweede Kamer, lower house of parliament. As per tradition, Dijsselbloem presented the Budget in the same briefcase his predecessor Lieftinck used to present the budget in 1946 after World War II. Dijsselbloem called the briefcase "a small symbol of recovery".
Purchasing power is increasing this year and next year and for the first time in five years Dutch have more to spend, the Finance Minster said according to the Volkskrant. "People are now searching the internet more often for wage increase than for severance pay." The public debt is falling as percentage of the gross national product. The economy is structurally improved.
But Dijsselbloem warns that there are also risks. Such as the worsening global economy, which is risky for the Netherlands as export country, and the tensions and conflicts in various parts of the world.
Economic growth for next year is estimated at 2.4 percent. The budget deficit is expected to decrease to 1.4 percent. The national debt is expected to be 64.5 percent of the GDP, compared to the current 66.4 percent. According to the central planning office, unemployment will amount to 620 thousand this year, and 605 thousand next year.
From everything that has already been leaked, it has been clear that the Budget includes good news for almost everyone. Workers in particular will benefit from the 5 billion euro tax cut on labor. The labor rebate is increasing to 50 thousand euros. The second and third tax brackets are decreasing with about 2 percent and the income level for the highest tax bracket is increasing. This is expected to produce 35 thousand jobs.
The government is putting more money into helping pensioners and people on benefits. Their purchasing power will increase slightly or remain at the same level at least. Housing allowance is not going down, healthcare allowance will remain high and the elderly discount is increasing.
Dijsselbloem emphasized the balanced distribution of wealth. The tax free base is increasing to 25 thousand euros and after that greater wealth will mean more taxes. Social Affairs is getting 300 million euros to spend on childcare allowance, to give young parents more space to combine work and family. Municipalities are getting more money for childcare and fathers are getting three extra days of paternity leave.
Defense is 350 million euros extra and another 60 million euros for missions. The cabinet is investing an extra 650 million for the reception of refugees. And Foreign Trade and Development Cooperation is getting 110 million euros to spend in the refugees' own regions.