1.2 percent increase as of July 1

The parties in the House of Representatives that wanted an additional increase in the minimum wage of 1.7 percent as of January 1 have adjusted their plan: it will now be 1.2 percent as of July 1, 2024.

According to GroenLinks-PvdA, D66 and ChristenUnie, the slightly lower increase still leads to a significant improvement in purchasing power for many people. Social assistance, the AOW and other benefits based on wages increase accordingly.

The House of Representatives will speak with the cabinet today and tomorrow about the budget and the changes that the House of Representatives wants to make to it. The House had plans for additional purchasing power worth 4.2 billion euros. The cabinet expressed a lot of criticism about this on Friday.

A large part of the money with which the House wants to pay for the higher minimum wage comes from raising extra tax money. The parties had to adjust their plans downwards because this financial cover proved to be unfeasible.

For example, the tax for companies on purchasing their own shares. Buying back your own shares increases the value of the share without having to pay tax. According to the calculations that the House of Representatives based on, this should yield 1.2 billion euros. But that turns out to be less so.

The bank tax is also a setback. The Chamber was counting on additional income of 350 million euros. But there is widespread objection to this levy, both from the government and the banking sector. The House has now reduced the bank tax to 150 million euros.

The banks’ shares fell rapidly two weeks ago following the announcement by the House of Representatives. Today, after the partial reversal of the bank tax, prices rose again.

“We are not deterred by the irrational movements on the stock market,” says GroenLinks-PvdA MP Tom van der Lee. He believes that the bill for a higher minimum wage and higher benefits can easily be placed with the banks and the business community.

Another part of the bill will fall to wealthy taxpayers because the top rate of box 2 and box 3 will increase. This also pays for the increase in childcare allowance. The parties have scrapped the plan to also increase the child-related budget.

VVD MP Eelco Heijnen warns of the consequences of the purchasing power plans. Companies call the measures unfavorable for the business climate. And banks have already threatened to leave the Netherlands, he says. Van der Lee sticks to the plans: “I really can’t take those kinds of threats seriously anymore.”

But the VVD’s motion not to increase fuel excise duties further was also criticized by the cabinet. The VVD wants to pay for this with money that is now in an economic growth fund. And that money is not intended for keeping petrol and diesel prices low, the government says. Heinen insists: “There is now 8 billion euros on the shelf of that fund, which we can use to pay lower excise duties for a year.”

The discussion in Parliament will continue today and tomorrow. Tomorrow, outgoing Minister Kaag and State Secretary Van Rij of Finance will respond on behalf of the cabinet.