Hoekstra Says Dutch Finances Are Holding Up Amid Covid Crisis
Rutte Ready to Tighten Screws on Big Business Before Dutch Vote
(Bloomberg) -- Finance Minister Wopke Hoekstra said the Netherlands is well positioned to ride out the coronavirus pandemic as he presented his final budget before next year’s election.
Hoekstra introduced a new tax on CO2 emissions and raised levies on property investors as he forecast an economic contraction of 5% this year and a budget deficit of 7.2% of GDP. The economy will rebound with a 3.5% expansion in 2021, narrowing the deficit to 5.5%, Hoekstra said.
“It is the biggest economic downturn since World War II, so you can hardly call this an optimistic day,” Hoekstra said as he handed over his plans to parliament in The Hague on Tuesday. “But with that in mind the numbers are quite positive.”
Prime Minister Mark Rutte is looking to appeal to middle class voters ahead of an election due in March next year and he delayed for a second year a plan to cut the main tax rate for companies from 25%. He is also toughening his traditionally friendly approach to big business amid signs that Dutch lawmakers are growing uncomfortable with the amount of support handed out to large companies during the pandemic.
“Austerity is not needed,” Rutte said earlier this month in an online chat with voters. “We have an apple stored away for when we need it.”
Before the budget, the government had already announced a third 11 billion-euro ($13 billion) package of subsidies for companies hit by the coronavirus lockdown, bringing the total to 48 billion euros so far. Hoekstra also set out details last week of a 20 billion-euro investment fund that aims to help modernize the Dutch economy over the next five years.
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