2020 Dutch budget to see big boosts for housing, youth care & migration; Opposition voices criticism

The national budget for 2020 ready to be presented to parliament, 17 Sept 2019
The national budget for 2020 ready to be presented to parliament, 17 Sept 2019. (Photo: Valerie Kuypers/Ministrie van Financien)

The ruling cabinet in the Netherlands outlined a plan for 2020 that includes an extra 350 million euros to respond to problems on the housing market, 300 million euros to tackle issues related to youth care, and 134 million euros on asylum procedures and migration. Minister Wopke Hoekstra of Finance presented the Rutte III government's budget for next year to the Tweede Kamer, the lower house of Dutch parliament, on Tuesday.

"We are in economically changing times," Hoekstra said in his address. "In countries around us, economic growth is falling and even contracting. International trade tensions create continuing uncertainty. Brexit is at the door," he stated.

He continued to say the Dutch economy "is still robust" though it is "leveling off." Economic growth is expected to reach 1.5 percent next year, down from 1.8 percent this year, with unemployment holding around 3.5 percent. Purchasing power should improve by 2.1 percent. "Many people who were still looking for work not so long ago now go to work every day. That is good news for many."

Later he noted, "That is why this government wants to continue to invest in society. And we allocate extra money, above the [levels in the] Coalition Agreement, for youth care, affordable housing and defense, among other things. In addition, we are taking additional measures to alleviate the burden on households."

Additional amounts earmarked for the court system totaled 61 million. The courts are dealing with a heavy deficit which could be covered with room for investment thanks to the additional spending.

Post-Brexit border surveillance will account for an extra three million, and military intelligence will require another 29 million. The two categories make up part of the Defense budget, which shows a 51 million increase in Defense and NATO spending. This brings Dutch spending up to 1.5 percent of GDP, it is still below the NATO minimum of 2 percent. Defense spending is likely to jump to 479 million in 2021.

The government also released a report shortly after the speech that broke down funding levels (in euros) by specific areas. Social security topped the list with 85.8 billion, followed close by health and care, funded at 82.2 billion. Education, Culture, and Sciences came in third at 39.1 billion. Further down the list, economic affairs and climate will receive 4.8 billion euros.

Of that, some 200 million euros is for challenges raised by the climate agreement, a figure which will bump up to nearly 300 million in 2021. Some of this money will be made available to citizens who want to improve the insulation of their homes, and to address issues related to new clarifications given on emissions rules in the Netherlands.

Before the speech, far-right FvD leader Thierry Baudet criticized the government for making choices that do more damage than good. "A hallelujah story is being told about immigration, the EU and the climate. But that actually costs us all our prosperity. That means we can't invest in the public sector. You don't hear about that from the government."

However, the budget also addresses public sector issues like infrastructure agency Rijkswaterstaat, which will see a boost of 80 million euros to address maintenance, and another three billion will be made available for roadway investments. Another 100 million will also be spent on waterway improvements, including berth improvements for the Wadden Sea ferry services, and better locks to reduce shipping delays.

"I did not hear anything about extra money for education", PvdA leader Lodewijk Asscher said to broadcaster NOS following the King's Speech, before Hoekstra's budget address. "And while more and more people cannot find an affordable home, I heard nothing about a rent reduction. For real progress, change has to happen now. Invest now in teachers, police officers, nurses. Look after the children and elderly now. Focus now on security for building later."

Indeed, the government did not make more money available to bump up primary school teacher salaries to equivalent levels of educators who handle older children.

Opposition party leaders react

The Tweede Kamer responded with some mixed feelings about the plans for the future. 50-plus leader Henk Krol was aggravated that so little was spoken about "imminent pension reductions." He said that, yet again, the elderly were somewhat ignored.

GroenLinks leader Jesse Klaver was among many who criticized a lack of ambition in the Dutch budget. He also said he wanted to see more public sector problems addressed directly. "The waiting lists in youth care are not solved. That could be better," he said.

Earlier in the day, CDA party leader Pieter Heerma praised plans to improve purchasing power for the middle class with extra tax breaks. He also liked the increased investment in social housing.

Far right PVV leader Geert Wilders disagreed, calling the budget plans "terrible." He said he would rather see money from the treasury disbursed directly back to the people instead of the investments and deficit reductions. According to him, too few have benefited from the economic growth.

Meanwhile SP leader Lilian Marijnissen wanted to see more spending in general, and responded to the budget with skepticism, saying that last year's promises were simply not kept.

That differs from the standpoint of SGP's Kees van der Staaij. His party is concerned that a shrinking budget surplus, and a possible 2021 budget deficit, will make it difficult to contend with economic problems in the future.

Some opposition parties are positive about gas extraction in Groningen being halted earlier than planned, but they feel the government's plans lack ambition in the areas of climate, education and the housing market, according to NOS.

Budget Leaks

Many aspects of the 2020 budget leaked out in advance of the two speeches on Tuesday. The full round-up of leaks was extensive, and included:

  • The basic health insurance premium is expected to increase by around 3 euros per month on average, and the healthcare deductible will remain 385 euros. 
  • The government plans to tackle the housing shortage with a subsidy fund for new construction projects for municipalities, and tax cuts for housing corporations, to encourage them to build more homes. 
  • Multinationals will have to pay profit tax in the Netherlands from 2021. The planned cut to corporate income tax will only apply to small and medium-sized companies that make less than 200 thousand euros in profit. 
  • A decrease in the self-employed and freelancer tax benefits scheduled to fall from 7,280 euros to 5,000 euros over eight years. Self-employed people are likely to be required to take out their own disability insurance.

 

Wopke Hoekstra on 2019 Prinsjesdag
Wopke Hoekstra, Finanace Minister in the Rutte III cabinet, poses with the briefcase traditionally used on Prinsjesdag. Sept. 17, 2019. (Photo: Valerie Kuypers/Ministrie van Financien)

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