‘The Netherlands has simply become poorer.’ The government should only accommodate people with low incomes and not the rest
Due to the explosive increase in energy and daily shopping, it is difficult to make ends meet. Where is it going?
A family with two children has already spent an average of 350 euros per month extra on energy and groceries this year. An unprecedented increase, which brings many people into acute financial difficulties. There is great political pressure on the cabinet to curb the loss of purchasing power.
The question posed by the Beugelsdijk is, there can be no discussion about it, responds Sjoerd, professor of economics at the University of Groningen (RUG). He says it has been going on for a long time. He considers it ‘a structural problem’ that the differences between rich and poor in the Netherlands have been growing for some time. “The government was planning to do something about it anyway.”
‘The Netherlands has simply become poorer’
According to him, because of the enormous rise in the poor, harder than the people at the top. “That starts with the narrowest wallet and also reaches the middle incomes.”
colleague Steven Brakman of the RUG that the origin of, among other things, arises through more energy and raw materials. This results in loss of income and prosperity. That’s no different. The Netherlands has simply become poorer.”
‘The higher incomes have to take their loss’
He agrees that the government should intervene. As far as he is concerned, this happens through a redistribution of income, from rich to poor. “The best way to do this is through taxes, starting with a one-off allowance for low incomes. You have to reduce the height to have more people. The higher incomes have to take their losses.”
That is also the view of University of Groningen professor of regional economics Jouke van Dijk. The rise in costs of energy, raw materials and groceries is the result of market processes. “The fact that energy is becoming much more expensive is actually good. That is the only way we will use less of it and the energy transition will get underway. The higher incomes have to dock. It’s annoying, but it will have to be.”
‘Draw the limit at 120 percent of the minimum wage’
The very lowest incomes should benefit from the government, others should not. “We have to pay it all together, one way or another. The more people you help, the more the others bleed. If you compensate half of the incomes, the other half has to pay for it. Draw the limit at 120 percent of the minimum wage.”
He denounces the temporary reduction in excise duty on petrol and diesel at the pump in the spring. That cost a lot of money, but it hardly helped the consumer. “It will be a little bit cheaper for everyone. That does not help. And the petrol should remain expensive, because we have to get rid of that. The cabinet can conduct a better income policy.”
‘It is crazy that companies now have top profits’
The business community may also contribute. Van Dijk: ,,Corporate profits are not so heavily taxed in the Netherlands. Furthermore, the companies are quite out of the wind in the corona time. It’s crazy that companies now have top profits, without money flowing back into the government coffers.”
Like Brakman and Van Dijk, they believe that a tax scheme can indeed be implemented for low incomes. “Then you are dependent on the tax authorities. It is ravaged by staff shortages and operational problems.”
‘The increase in the minimum wage could bring you forward’
In his view, the cabinet faces a ‘diabolical dilemma’. “It has short-term conditions it can run. What it can do is keep the VAT on energy low, so extend the current reduction after January 1. But then the allowances also go to the rich. A supplement for low incomes does not have that disadvantage. Maybe that’s the best way.”
The unions are calling for an increase in the minimum wage. This has already been agreed in the Coalition Agreement. ,,You could bring that increase further forward”, judges Beugelsdijk. Brakman also believes that the minimum wage should be built up, but mainly to solve the problem of personnel shortages. “But of course it will help the lowest incomes.”