Gov't budget falling up to €15 billion short: report
In the coming days, the coalition parties will look for ways to cover a 10 to 15 billion euros shortfall in the budget created by unexpected setbacks these past few months. They are looking for where they can get the money, but any solution is politically controversial, NOS reports.
The setbacks include billions extra pushed into purchasing power, adjustments to savings tax resulting in the government making less, and state pension continuing to be linked to minimum wage. A new setback is that a new corporate tax for multinationals will not be implemented as planned after Poland voted against an EU deal on this topic last week, sources close to the Cabinet told the broadcaster.
The Cabinet had already counted on the 1 billion euros this new corporate tax would raise, according to NOS. To compensate for this, the coalition is considering a tax increase in "Box 2" - the tax for major shareholders that many entrepreneurs pay. They're also looking at Box 2 to make up for changes to the savings tax in Box 3. The court ordered the government to compensate savers for taxes paid on theoretical interests on savings instead of actual interest received. The Cabinet expects this to cost 7 billion euros, the broadcaster's sources said.
The government also has to push a few billion euros extra into Defense. They plan to take this money from money intended for the National Growth Fund. The Cabinet planned to put 6.7 billion euros into that fund, but that seems to have been abandoned.
The Eerste Kamer, the Dutch Senate, also scrapped the Cabinet's plan to de-link state pension and minimum wage. Continuing to let state pensions grow with minimum wage will cost an estimated 2.4 billion euros a year. The coalition must find a way to cover that amount.
And finally, with the war in Ukraine and inflation skyrocketing, the Cabinet pushed an extra 3 billion euros into protecting Netherlands residents' purchasing power. The Cabinet hopes to do more in the coming period, but that money has to come from somewhere.
The government is, therefore, again looking at taxing wealthy Netherlands residents more, according to the broadcaster. "If you want to do something for vulnerable groups, then it is a redistribution of money within the Netherlands," Minister Karien van Gennip of Social Affairs recently said. "So other people will have to pay for that."
The other alternative is to cut spending or allow the national debt to rise further. The coalition parties will discuss possible solutions this week as they start working on the Spring Memorandum - the update to the year's national budget. The Spring Memorandum must be submitted to the Tweede Kamer, the lower house of the Dutch parliament, by June 1.