Millions of notes: corona attack on the economy, but room for investment

“Corona is an attack on us, our society and our economy That is what Minister Hoekstra writes in the foreword to the Millions Note.

The state budget for 2021 is dominated by the consequences of corona, writes Hoekstra. But it is not just about the corona crisis. “We will continue to reform the labour market, there will be additional resources for affordable housing and gas production will be further reduced

Some striking editions from the Prinsjesdagstukken:

EUR 5 billion up to 2030 for measures to reduce nitrogen precipitation EUR 2 billion for investments in rail, water, roads and defence, among other things, are being brought forward The budget for Justice and Security is being increased (an additional EUR 300 million next year and then EUR 350 million structurally). Because the number of pupils and students is higher than previously calculated by Statistics Netherlands (CBS), the Education budget will be increased by an additional 450 million per year. Half a billion euros will be earmarked for combating the corona crisis in vulnerable countries. The Social Affairs budget for this year is 230 million euros in the minus, due to the growth in the number of WW benefits

Hoekstra goes on to write in the foreword: Unemployment is rising, the budget deficit is rising, and public debt is likely to rise above 60% of GDP

Under normal circumstances, public debt should never exceed 60% of the total size of the economy, otherwise savings would have to be made. But that maxim is now being abandoned.

Next Tuesday, on Prinsjesdag, the Minister will present the Millions Memorandum to the House of Representatives. As every year, the document has been leaked in advance.

Second wave

An average household will gain 0.8% in purchasing power next year, according to Princes Day figures. The forecast is that the working population will improve by 1.2%. While benefit recipients with 0.5 and pensioners with an increase of 0.4 are lagging behind a little, but will still improve next year.

The question is what the figures are worth. Due to the corona crisis, the near future is very uncertain. If there is a second wave, the economy could end up in much heavier weather than is currently assumed.