Column | Cost crisis: more can be done and more must

More can be done and more must be done. A group of Dutch people has been hanging on the edge for some time. They have flexible work, low wages, draughty rented houses, little income, little savings, problems with benefits, a pile of uncertainties. The Central Planning Bureau calls them structurally vulnerable. The precariat and the insecure workers, says the Social and Cultural Planning Office.

Over the past twenty years, we have increasingly placed the risks of the economy on them. In 2003 almost a third of people with a low level of education were flex workers, now that is half. Low wages and flexible work are not a logical combination. With equal relationships between employees and employers, flexworkers should earn more than permanent employees: the salary should compensate for the uncertainty.

Someone earns from these proportions and it is not the suitcase porters at Schiphol.

Gas and electricity prices are now hitting this group like a sledgehammer. Not all at once, not all equally hard. In some households, the energy bill rises much faster than in others. It depends on all sorts of things: have you agreed on a fixed price for a long time or have you just signed a new contract? Do you live in an isolated house or not? But it is certain that inflation hits lower incomes harder and that purchasing power estimates underestimate the impact on low incomes, the CPB warns.

The cabinet is trying to cushion that blow by significantly increasing income at the bottom as of 1 January, according to the plans for Budget Day that the coalition and the cabinet themselves leaked. The minimum wage will increase by 10 percent in 2023, and benefits will increase with it. Fees go up, and taxes go down. That should support the structurally vulnerable now that they see prices rise faster month on month. In August inflation reached a record 12 percent. Also, part of the temporary tax cuts on energy bills and gasoline will be maintained. Just like the energy surcharge for minimums of 1,300 euros.

There is little new aid in the barrel for the coming months, it also leaked. Roughly speaking, it remains at the almost 7 billion euros that the government has already earmarked this year for lowering taxes on energy and fuel and the energy surcharge. Doing more will not be possible this year, the cabinet said time and again. This causes too many headaches for implementers such as the Tax and Customs Administration.

And yet more is needed for those who really cannot make it in the coming months. An energy safety net. The gas and electricity prices are so exorbitant, the government must provide a buffer in the coming months for those who simply cannot afford them and risk being cut off. We don’t know exactly who will run into problems this coming winter. It can also be households with an income up to the average, according to a stress test by the economists of the CPB before the summer. It is important to know that the group just above the minimum has so far received the least help from the government. After all, they are not entitled to the 1,300 euros surcharge and see their costs rise relatively much. No wonder that debt counselors, municipalities, schools, energy suppliers signal increasing problems.

So be creative and come up with a safety net for those who can no longer afford their gas and light. Together with the energy suppliers, the cabinet could grant deferred payments to households in trouble, or simply money. We are a smart and rich country, we should be able to do this. On Friday, Prime Minister Mark Rutte (VVD) hinted that help will still be forthcoming this year. Ministers Carola Schouten (ChristenUnie) and Rob Jetten (D66) were to talk to energy suppliers on Friday evening. heh.

Yes, next year the cabinet will support lower incomes considerably, but a safety net for acute emergency is also needed. Targeted help for those who fall through the ice.

Marike Stellinga is an economist and political reporter. She writes about politics and economics here every week.