The 2024 Dutch budget in a nutshell: €433.6 billion in spending, some tax increases
The caretaker Cabinet in the Netherlands presented its 2024 budget on Tuesday, which amounts to a total 433.6 billion euros. The proposed budget carries a deficit of 30.7 billion euros in total, and includes a 2 billion euro plan to boost purchasing power and prevent more households from falling into poverty. Along with that, the government also published details of changes to tax policy in the country, including tax hikes for wealthier households and smaller businesses, and confirmed that the price for basic health insurance will rise by about 144 euros per year in 2024.
The plan to address poverty is meant to boost purchasing power for every resident of the Netherlands by an average of 1.7 percent next year. This includes significant increases in subsidies for children and rental housing, as well as a moderate boost to the employment tax credit. Municipalities will also get 50 million euros more to provide assistance to their residents, and over 125 million euros will be set aside to help keep people with disabilities employed.
To counter this, the Cabinet will not raise the amount that falls under the tax-free allowance with regards to the Box 3 asset tax. That will remain at 57,000 euros for individuals, or 114,000 euros for tax partners, instead of increasing with inflation. On top of that, the Cabinet is accelerating their plan to tax gains on Box 3 assets at a rate of 34 percent instead of 32 percent. That measure had been planned for 2025, but will start in 2024 instead. More forms of wealth will also be taxed as part of the Box 3 system.
Small and mid-sized businesses will see their profit exemption also fall from 14 percent to 12.7 percent. This is the amount that entrepreneurs are allowed to keep tax-free. "As a result, the difference in the tax treatment of employees and the self-employed will become smaller," the Cabinet said.
The presentation of the budget took place on Prinsjesdag, which falls annually on the third Tuesday of September. The highlight of the day was the eleventh Prinsjesdag speech by King Willem-Alexander. In his speech, he called for a stronger Dutch society and a Europe that is less dependent on forces like Russia and China. The King's Speech was followed by Cabinet ministers releasing their plans for next year.
Key budget proposals for 2024, alphabetically per subject:
Care and Health
- 9.3 million euros will be available for electronic nursing transfers in 2024 to reduce the administrative burden that many nurses face;
- The total basic health insurance premium will increase by approximately 12 euros per month. As a result, the total health insurance premium in 2024 will be an average of 149 euros per month;
- The healthcare allowance will amount to a maximum of 127 euros per month;
- In 2023, the healthcare allowance was increased due to declining purchasing power. This increase will expire in 2024;
- 345 million euros will be allocated for the Housing, Support and Care for the Elderly (WOZO) program;
- 7.8 million euros in subsidies will be made available to encourage cohabitation between young and old people;
- 70 million euros in subsidies will be available to build social housing suitable for providing care;
- An extra 1.45 billion euros will be made available for youth care. That money will go to the municipalities;
- Savings for the Youth Reform Agenda 2023 - 2028 should amount to 374 million in 2024.
- Defense spending will amount to 21.4 billion euros. This represents 1.95 percent of the gross domestic product. NATO countries agreed that each country would spend 2 percent of its GDP on defense;
- The Netherlands will continue to support Ukraine with equipment and training in 2024.
Economy and Energy
- The government will continue to invest in major projects for sustainable economic growth over the long term via the National Growth Fund;
- The Investment Subsidy for Sustainable Energy and Energy Savings (ISDE) will be expanded in 2024. This subsidy is for homeowners and entrepreneurs to make their home or business premises more sustainable;
- The energy investment deduction for entrepreneurs will be extended by five years to 2028;
- From January 1, 2024, the energy investment deduction percentage will be 40 percent.
- 38.4 million euros will be allocated to improve brick-and-mortar online library networks. This allows municipalities, for example, to apply for subsidies for new libraries or better collections;
- 324.1 million euros will be available to provide more extracurricular activities and support to students who need it most. This includes help with homework, technology lessons, and sports;
- 51.8 million euros will be available for intermediaries working at schools. They ensure good contact between schools, students' homes, and organizations in the neighborhood, and help parents and children get the right support when necessary;
- 166 million euros will be available for free meals at school for students who need them, for example, due to tensions or financial worries at home.
- 300 million euros will be allocated to help municipalities build more homes faster, and to make new homes more affordable;
- Construction projects that are in danger of having to stop due to changing economic circumstances and a lack of available financing can apply for the Startbouwimpuls subsidies. The money available for this will be increased from 250 to 300 million euros;
- The rental allowance will increase by more than 30 euros per month from January 2024. The government will allocate 750 million annually for this.
- 3.6 billion euros will be allocated for foreign trade and development cooperation;
- The government wants to achieve the UN Sustainable Development Goals (SDGs). Companies can count on economic diplomacy and the use of trade instruments from the Dutch government to better seize economic opportunities.
Poverty and Purchasing Power
- Child budget (Kindgebondenbudget) increases by up to 750 euros for the first child;
- Child budget (Kindgebondenbudget) increases by up to 883 euros for the second child;
- Child budget (Kindgebondenbudget) increases by up to 400 euros for children aged 12 to 17;
- Rental housing benefits will rise by up to 416 euros;
- The employment tax credit will increase by 115 euros;
- Cuts will not be made to credits for people who develop a disability before they turn 18, or during their studies;
- Social assistance benefits will increase at the same rate as the minimum wage;
- A total of 89 million euros will be readied to assist 6,500 households expected to fall below the poverty line. They will receive an additional benefit for the next four years;
- The Temporary Emergency Energy Fund will be extended until at least March 2024 to provide assistance with paying energy bills;
- Municipalities will receive 50 million euros in total to provide special assistance to struggling residents, and to identify people with debt problems earlier;
- An additional 73.5 million euros will be used to bolster the SLIM learning and development scheme through 2027. The scheme had been for small- and mid-sized businesses, but will now also include individual training;
- A program to provide employment for people with disabilities who are able to work, but not at many workplaces, will get a cash injection of 64.7 million euros;
- Another 63.9 million euros will be earmarked for special businesses and organizations that provide people with disabilities with more skills and abilities to eventually find a job with a regular employer.
Poverty and Purchasing Power in the Caribbean Netherlands
- A total of 30 million euros will be made available to address poverty on Bonaire, St. Eustatius and Saba in 2024 by increasing social benefits to similar levels as in the Netherlands;
- A total of 32 million euros will be made available to address poverty on Bonaire, St. Eustatius and Saba in 2025;
- Child benefits will increase by 90 U.S. dollars per child per month;
- An unspecified sum will be earmarked to provide schoolchildren with meals;
- Fixed rates for drinking water will be reduced;
- Fixed rates for internet connections will be reduced;
- Subsidies for fixed electricity rates will remain unchanged;
- The existing energy allowance will remain unchanged;
- An unspecified sum will be provided to keep public transport affordable;
- The food bank on Bonaire will receive additional support.
- More than 4 billion euros will be allocated to improve the asylum procedure. This money will be used to expand the number of reception places to 41,000, help municipalities create shelters, and promote return to the country of origin if someone is not allowed to stay in the Netherlands;
- 3.2 billion euros will be available to compensate municipalities for emergency shelters for refugees from Ukraine;
- An additional 102 million euros will be spent to strengthen the monitoring and security system in order to provide security to persons, objects, or services confronted with a security threat. From 2025, this will be 112 million annually;
- 43 million euros will be spent on youth protection, among other things, to reduce the workload for youth protection professionals, attract more new staff, and retain current staff. From 2025, 50 million euros will be spent annually for youth protection.
Traffic and Transport
- 4.6 billion euros will be spent on maintenance and renovation of bridges and viaducts on rail and road;
- Nearly 30 million euros will be allocated for more and smarter charging stations for both trucks and passenger cars;
- An additional 40 million euros will be available to install power points for ships.