Dutch households to see 1.3% rise in purchasing power, budget leaks show

Purchasing power in the Netherlands will rise slightly more than initially estimated, according to the foreword of the government’s budget memorandum, confirmed by sources in The Hague following reports in various media. According to the calculations of the Netherlands Bureau for Economic Policy Analysis, households will see an average increase of 1.3 percent. In the previous estimate, this was 1 percent.

The average salary increase for 2025 is estimated at 3.5 percent, which will help support purchasing power. Economic growth for 2025 is predicted to be around 1.9 percent, with a decline to 1.5 percent expected the following year.

Finance minister Eelco Heinen warned in the foreword that prosperity is under pressure and that choices must be made for the future. He added that he has confidence in politicians’ ability to make those choices.

As traditionally happens every year, some of the plans that the caretaker cabinet is set to present on Budget Day next Tuesday have already leaked. Heinen expressed disappointment that the plans became public. He said he would prefer to announce them “all at once,” so that voters can see “the full story,” including the less popular measures. So far, mainly plans pushed through by VVD ministers during the budget negotiations have leaked.

For example, the widely disliked CO2 levy for the industrial sector will be suspended for the time being, and additional funding is reportedly being allocated to the technology sector. A longer fuel tax discount will partially come at the expense of reintroducing red diesel, which the coalition’s sole remaining partner, the BBB, had advocated.

“What I see in the newspaper is good news,” Heinen said, somewhat unsurprisingly. He also claimed not to know how the details were leaked.

Gaps in the national budget that have emerged over the past year will at least partly be filled by cuts across multiple ministries, Hague sources told ANP. The so-called “cheese slicer” approach involves withholding budget increases meant to offset inflation.

A gap of half a billion euros has also arisen due to the abolition of a rent freeze plan. This spring, the coalition decided to freeze social housing rents for two years. Since housing benefits rise along with rents, the plan was set to generate annual savings of 492 million euros.Caretaker housing minister Mona Keijzer canceled the plans shortly after the PVV left the coalition.

The so-called “grocery bonus” of one billion euros, which was to be paid out through housing benefits, was also scrapped. All in all, after 2026, a gap of 492 million euros per year remained.

In addition, another 177 million euros per year had to be secured to maintain the education opportunities scheme, which supports vulnerable secondary school students with measures such as extra guidance. The scheme was scrapped in the spring budget. At the beginning of July, however, a majority in parliament asked the cabinet to “reconsider” this decision.

Exactly how much will be cut from each ministry is not yet clear. This may not be announced until next spring. Not every ministry is equally affected by the cuts to the so-called price adjustment. It is unusual to plug budget gaps by making cuts elsewhere. In The Hague, the standard practice is for ministries to find money within their own budgets to cover setbacks.