Princes Day 2025: Solid Foundation for Future Choices

The Dutch economy and public finances are currently in good shape. Wages are rising, and there have never been so many people employed. However, Minister Heinen emphasizes that there is work to be done. “Our starting position is good. We live in freedom and prosperity in one of the happiest countries in the world. To maintain this, significant choices are necessary, as we see expenditures rising. International unrest underscores the importance of greater defense investments. Additionally, spending on healthcare and social security is increasing. In short, we are at a crossroads. Let’s work together despite our differences and do what is necessary for a stronger Netherlands,” said the minister.

Persistently high inflation is making life more expensive. Therefore, the cabinet is extending the discount on fuel taxes, which will reduce prices at the pump after the New Year. Furthermore, the education opportunities scheme will remain in place, and there will be no cuts to regional public transport in 2026. Additionally, starting in 2028, more money (increasing to € 50 million structurally) will go to the prison system. This meets important requests from the House of Representatives.

Extending the fuel tax discount on gasoline and diesel until January 1, 2027, will cost the treasury € 1.7 billion. This will be covered by income from the CO² tax on goods produced outside the EU (CBAM), a lower-than-previously-announced refund of the energy tax, and the elimination of certain specific cost items from the tax scheme for foreign workers temporarily in the Netherlands (ETK scheme), such as costs for fixed telephony.

The cabinet remains committed to budget discipline and trend-based budgeting policy. The basis for the budget for 2026 was laid in the Spring Memorandum. This included, in addition to the framework agreement, significant investments in defense (€ 1.2 billion structurally) and municipalities. These matters are now part of the Millionennota. All investments are covered by the cabinet within the budget. The same applies to several disappointments, for example, with gas revenues, EU contributions, and arising from the liquidation loss account ruling. The income and expenditure framework closes over the entire budget period. Thus, there is a balanced budget, and no bills are being pushed into the future.

For 2026, the budget deficit is expected to be 2.9% of gross domestic product (GDP). An improvement of 0.7 percentage points compared to the Millionennota 2025. The deficit is expected to decrease further to 2.1% in 2030. The national debt is expected to be 47.8% of GDP by the end of 2026 (2.3 percentage points lower than previously expected last year). Thus, the Netherlands meets the European agreements regarding deficits (maximum 3%) and debt (60%). This also applies to the years 2027 to 2030.

The Tax Plan includes, in addition to tax measures that contribute to purchasing power, measures for a better tax system. For instance, tax evasion by adding a hint of dairy to soft drinks and vegetable and fruit juices will no longer be possible. Additionally, the air travel tax will have different rates for short, medium, and long flights. For shorter flights, you pay less than for longer flights. Longer flights to the Caribbean part of the Kingdom will fall under the lowest rate. Furthermore, there will be a focus on further greening the vehicle fleet in the Netherlands by promoting the use of emission-free cars.