Budget Day leak: No increase in purchasing power, more money for defense and police

Many measures have already been leaked to the media in the run-up to Budget Day. As far as is known, these are the most important decisions that the Schoof I Cabinet will announce on Tuesday in next year's budget:

• Purchasing power will not increase by 1.1 percent in 2025 - as the Bureau for Economic Policy Analysis (CPB) had previously calculated - but by 0.7 percent, according to the purchasing power tables available to the ANP. The Cabinet appears to be following the advice of CPB director Pieter Hasekamp to postpone part of the tax cuts from 2025 to later years. Hasekamp said last month that the economy is in “surprisingly good shape,” and therefore, cash handouts are less necessary.
  
• The cabinet will not reduce tax breaks for foreign workers. The regulation that allows expats to claim 30 percent of their salary tax-free in the first few years is absolutely necessary, according to innovative companies. However, some parties, including the coalition party NSC, sharply criticize the regulation. As a result, it would be gradually reduced to 10 percent. This austerity measure is largely off the table: the percentage of wages on which no tax is levied is now 27 percent.
  
• The police will receive tens of millions of euros extra each year. Moreover, due to economic growth, more money goes to the defense sector. Insiders confirm reports of this from various media.
  
• There will be an additional level of income tax. As a result, people will pay a lower tax rate on the first part of their income, leading to savings. Child benefits will also be increased.
  
• The land transfer tax for landlords will be lowered. On the contrary, the tax has been raised slightly in recent years. Now, the government is lowering the rate from 10.4 percent to 8 percent.
  
• In addition to the tax relief for landlords, the government is also introducing a measure for poorer families: the scheme for free school meals will be extended after all.
  
• Money has been set aside to create a new early retirement scheme. The existing tax exemption that allows companies to retire employees in heavy occupations earlier will expire at the end of next year. Major actions are being taken in various sectors.