New Dutch budget is a “balanced package” between bad and worst


Next year’s budget is nearly finalized. The outgoing cabinet is allocating 2 billion euros to primarily support the lowest incomes.

According to outgoing Finance Minister Sigrid Kaag, it constitutes a “balanced package.”

This year’s budget focuses on the increasing poverty. Without additional measures, almost a million people would fall below the poverty line next year. This is partly due to the support packages created last year due to expensive groceries and energy, which will expire in 2024. For example, the energy allowance of 1,300 euros for the lowest incomes will definitively end.

The outgoing cabinet is allocating 2 billion euros for purchasing power measures. The funds primarily target the lowest incomes to combat poverty. Kaag couldn’t confirm whether everyone at risk of poverty can breathe a sigh of relief, saying, “I cannot peek into everyone’s wallet.” However, she mentioned that the cabinet crafted the budget with a focus on lower incomes.

So far, it has been leaked that the housing allowance will be structurally increased, and the child allowance for the first child will be a one-time boost. Additionally, the labor tax credit will be slightly increased. It’s not yet clear which income brackets this applies to exactly.

Furthermore, higher-income individuals will shoulder some of the costs. Due to inflation, the income threshold for the second tax bracket is expected to shift. However, this shift will be less significant, causing people to pay the highest tax rate on a slightly larger portion of their income.
Parliament can make adjustments

Traditionally, the budget is announced on Prinsjesdag, which falls on September 19th this year. Since the government has fallen, there won’t be much new policy. Demissionary cabinets are expected to mainly maintain the status quo.

After Prinsjesdag, the Dutch Parliament will debate the budget, and they have the authority to make adjustments. These adjustments must be financially covered, following the rules. Sigrid Kaag has emphasized in the past that the era of “free money” and automatic compensations is over.

By: Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at

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