News item | 11-21-2022 | 5:40 PM
The price cap and the support for energy-intensive SMEs will cost billions of euros next year. In addition, interest expenditure by the government is also rising. These costs weigh on the national budget. The cabinet will look for a solution for this in the coming months. Minister Kaag of Finance reports this in the Autumn Memorandum that she has sent to the House of Representatives.
As always, this Autumn Memorandum presents the latest state of affairs on the 2022 budget and provides an update since the Budget Memorandum. This time, the Autumn Memorandum also partly looks ahead to next spring.
Support for the (semi)collective sector
Next year there will be an additional price adjustment in the budgets of ministries for the funding of schools, cultural institutions, associations and other organizations in the (semi) collective sector. This is necessary because the regular indexation had taken place before the large price increases. The House of Representatives has submitted specific motions on this subject (Paternotte et al., Heerma et al.).
In addition, swimming pools will receive 207 million euros for their energy costs in 2022 and 2023. An emergency fund of 6 million euros will be set up for amateur sports clubs that have high energy costs. 30 million euros will be reserved for care institutions that run into problems.
Coverage
For the major energy support measures, so-called cover still has to be found in the national budget: revenues and expenditures of the government must remain in balance. If expenditures are not covered, the bill would be passed on to future generations and the government risks fueling inflation.
The price ceiling on the energy bill is expected to cost approximately 11.2 billion euros. The energy costs allowance for energy-intensive SMEs is estimated at 1.65 billion euros.
To cover these costs, a solidarity contribution will be levied on excess profits in the fossil sector in 2022, which is expected to yield 3.2 billion euros. And there will be a levy for producers who generate electricity using solar, wind and nuclear technology, who can make large profits with low costs now that the electricity price is so high. This levy is currently being worked out; the yield is not yet known. It is estimated that another 7.5 billion is needed to cover the energy support measures. This could increase further if energy prices continue to rise.
Interest Expenses
After a period of low interest rates, interest rates are rising worldwide. This also applies to the interest rates that the Dutch government pays on its national debt. Expiring loans with low interest rates must be refinanced with higher interest rates. As a result, government interest expenditure increases. This can rise to 5.8 to almost 9.2 billion euros per year. The cabinet will decide in the spring how it will cover interest expenditure.
Under-exhaustion
The so-called underspending amounts to a total of 2.7 billion euros. Many ministries spent less money this year than budgeted. For example, because planned work could not be carried out because no personnel could be found. Or because less money was needed than expected, for example if fewer subsidies are applied for.
Deficit and debt
The estimate of the deficit in the national budget (EMU balance) is minus 1 percent of gross domestic product. This is a deterioration of 0.1 percent compared to the balance in the Budget Memorandum. The government debt estimate is 50.4 percent of GDP, a deterioration of 0.6 percent of GDP.