Freeze energy prices, oblige landlords of draughty houses to lower their rents, increase the minimum wage faster, make public transport cheaper, increase the health care allowance, increase the housing allowance, increase the child budget, set the VAT to zero. Many factions in the House of Representatives know how they would support the purchasing power of ordinary Dutch people, if they had the say. Why isn’t the government doing that?
The long list of proposals from the House is not without reason. Few political groups are satisfied with the extra 2.8 billion euros that the government is spending to cushion the consequences of the sharply increased energy prices. According to many groups, lower middle incomes in particular are not helped enough, it turned out on Tuesday and Wednesday during the debate in the House of Representatives about the purchasing power plan that the cabinet presented just before the municipal elections.
The support is not focused enough, many MPs noted. According to left-wing parties, higher incomes benefit too much. Everyone will benefit from the reduction in excise duty on petrol and diesel as of April 1, including people with an excellent income, as will the reduction in VAT on energy bills as of July 1. “What I have trouble with,” said CDA MP Inge van Dijk, “is that we sometimes shoot with hail and public money does not end up in those empty wallets.”
No beauty prize
Despite the widespread criticism, most suggestions from MPs were rejected by the three responsible ministers in the cabinet. They could not be implemented so quickly, there was no financial cover or the measure was too untargeted, said ministers Sigrid Kaag (Finance, D66) and Karien van Gennip (Social Affairs, CDA) and State Secretary Marnix van Rij (Fiscality, CDA). The package does not deserve a beauty prize, Kaag admitted, “far from it”. But what to do about the purchasing power of households in the current year is exceptional, according to Van Gennip.
In that case, not much can be done, such as for example changing the income tax, said Van Rij. Moreover, citizens would only benefit from this next year if they file their tax return for this year. Surcharges could change more quickly, according to Van Rij, but even then “you run into technical implementation risks.”
The decrease in purchasing power that the economists of the Central Planning Bureau expect for this year is exceptional, the total amount that the cabinet will spend on repairs this year is also the same, according to the ministers: 2.8 billion euros now, plus the 3.2 billion euros to which was already decided last October. Kaag called it her “expensive and perhaps sober duty” to also look after the treasury.
Due to critical questions from Pieter Omtzigt, the debate was temporarily suspended
Several MPs were not satisfied with those answers, especially Van Gennip was unable to convince MPs. GroenLinks leader Jesse Klaver wanted all decision notes and memos from officials. Can the cabinet really do nothing for tenants or does the cabinet not want it, he wanted to know, for example.
Is the problem that the cabinet has no financial cover or that municipalities say they cannot implement it, asked D66 MP Steven van Weyenberg about the frequently heard suggestion to expand the group of people who receive 800 euros as a compensation for the high energy bill. Now about 800,000 households with the lowest incomes receive this money. Anyone who has just a little more income than 120 percent of the social minimum (about 1,500 euros gross per month for a single person) is missing out.
Debate halted
Yes, that’s a hard job, said Van Gennip. But giving 800 euros to everyone with an income of up to 130 percent of the social minimum, as various parliamentary groups want, costs “an enormous amount”. Moreover, those households do get something, says Van Gennip: they benefit from the lower VAT and excise duties that the cabinet wants to implement, and from the reduction in the tax on energy bills that the cabinet already decided in October. All in all, according to Van Gennip, that comes down to just under 700 euros for an average commuter with average energy consumption at home.
Critical questions from independent MP Pieter Omtzigt about the law behind the 800 euros ensured that the debate was temporarily suspended. Omtzigt denounced that the law had not yet been discussed in the House, but that municipalities were already allowed to pay out from the cabinet. “This is not lawful, you will be punished by the Court of Audit.” In May, the House can vote against that law, “but then the money has already been spent.”
On the income from which year should municipalities actually base themselves when they give people 800 euros? The income from 2021 and 2022 is not possible, because that is not yet certain, Omtzigt noted. The income from 2020 is a long time ago: someone can now earn much less. Van Gennip referred the question to the discussion of the law by Minister Carola Schouten (Poverty Policy, ChristenUnie). But Omtzigt wanted a quicker answer. In order to provide him and other MPs with information, the House decided to continue the second part of the debate on another day.
Despite the criticism, the question is how much the government will change the package. The cabinet does not have a majority in the Senate, but it is not certain whether the opposition can capitalize on this. The package comes in parts to the Chambers. Left-wing parties will not be quick to vote against the law that gives 800 euros to people on the lowest incomes. Right-wing parties will not be quick to vote against a VAT and excise cut.
One request from the House could count on the goodwill of the cabinet. VVD and PvdA want to increase the tax-free kilometer allowance that employers are allowed to give to their staff. Van Rij said to look into it.