The Cabinet sees opportunities for additional support for purchasing power

The opposition had to wait a long time for that, but on Wednesday night the government seemed to have listened to the many requests for further purchasing power measures. Shortly after half past six, Minister Sigrid Kaag (Finance, D66) during the debate on the spring memorandum, which had already been going on for hours, listed six options that could provide relief to households that have run into financial problems this year.

PvdA party leader Attje Kuiken reacted with relief: “It is good to hear now what is possible, we have never heard that before.”

For months, Route IV pretended to take the opposition seriously when it came to the acute loss of purchasing power caused by rising inflation, but in practice it did not. While this loss continued to grow – the war in Ukraine pushing up fuel and food prices almost daily – the mantra of the ministers involved was originally: we wait, we look at it and we return to it.

The Cabinet first wanted to await the assessment from the Central Planning Bureau (CPB) and then withdrew from (closed) hearings with the top of the coalition. In early May, Kaag and Prime Minister Mark Rutte (VVD) also had coffee with the group leaders from all opposition parties, but they did not have the impression that they were really being listened to. The spring memorandum presented last month included new, expensive measures: the national pension was again linked to the minimum wage, and defense spending was further increased. However, that was not enough for the opposition. GroenLinks and PvdA announced already last week that they “do not agree” in the spring memorandum.

Also read: Economists: Route IV is making a mess of it

It is important for the Cabinet to have at least one opposition party behind its own plans, because it lacks six seats from a majority in the Senate. Although the spring memorandum – originally intended to provide an overview of this year’s budget – is not a bill, any resulting budget adjustments must be approved by both the House of Representatives and the Senate.

On Wednesday, opposition parties again seized the opportunity in the plenary debate to push for further measures to mitigate the loss of purchasing power. The CPB estimated in a report late last week that if the policy remains unchanged, up to 1.2 million households could run into financial problems next year.

In response, Prime Minister Rutte said there is “not much possible” to help people financially. Since last fall, the government has already earmarked $ 6 billion for purchasing power policy.

Not categorically no

But at the start of the debate on Wednesday, Rutte proved a little more optimistic: “We can not promise anything, but neither the finance minister nor I have said: it is categorically no.”

The options that Kaag listed also include a proposal from GroenLinks and PvdA, which already during the debate received sympathy from the coalition parties’ group leaders. This is a temporary supplementary benefit for persons receiving health benefit. In addition, Kaag mentioned a new energy supplement on top of the previous compensation that the cabinet has already introduced.

In listing the options that can be introduced in the short term, Kaag made some reservations, both positive and negative. The list is “not exhaustive” but still needs to be checked for “feasibility and coverage”. “We will do it properly,” Kaag said.

Inefficient and inefficient

The problem with ad hoc purchasing power measures is that they do not always reach the intended households effectively. Economists condemned Wednesday in NRC the untargeted policy with which the government has so far sought to mitigate the consequences of energy price increases. This entailed a specific allowance of 800 euros for approximately 800,000 vulnerable households and a reduction in taxes on fuel and energy. The CPB already called this “inefficient and effective” on Friday.

With that criticism in mind, Rutte on Wednesday was cautiously enthusiastic about some of the opposition’s proposals: “We do not reject them”. But he would not promise anything yet. “We really need to take a closer look at the technology. It’s quite complicated, so we are not going to cross tonight. “

It was not acceptable to the opposition. That is why GroenLink’s leader Jesse Klaver asked to have the debate suspended, only to continue it once the Cabinet has completed its study on budget coverage and practical feasibility. The whole House agreed on this, so that the public negotiations on a new purchasing power policy will soon continue.

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