> Postbus 20201 2500 EE Den Haag The Netherlands

Mr. Olli Rehn
Commissioner for Economic and Monetary Affairs
Wetstraat 200
B-1040 BRUSSELS
BELGIUM

Financial and Economic
Policy Directorate
Korte Voorhout 7
2511 CW Den Haag
Postbus 20201
2500 EE Den Haag
www.rijksoverheid.nl

Our reference
AFEP 2013 345

Your letter / Your reference

Date
Subject Additional budget agreement 2014

Encl.
1

Dear Mr. Rehn,
Please find enclosed an English translation of the additional budget agreement
2014 of the Netherlands. On Friday 11 October, the coalition parties together with
a number of opposition parties (D66, ChristenUnie and SGP) reached this
agreement. Together they constitute a majority in both chambers of parliament.
The agreement facilitates the realisation of the common ambitions for economic
growth and employment, sound public finances and a balanced income distribution.
The agreement presents a number of amendments to the Budget Memorandum
2014, which was included in the earlier reports to the European Commission, i.e.
the Draft Budgetary Plan, the Effective Action Report and Economic Partnership
Programme. Most notably, the agreement contains higher expenditure cutbacks
and lower tax increases. At the same time environmental taxes are increased,
enabling a reduction of the burden of income taxes and social contributions on
labour. The agreement also includes higher spending on education and
innovations, while a number of labour market measures will be adjusted and
accelerated to strengthen its impact on a well-functioning labour market. Social
partners have informed us that they support the adjustments and accelerations.
With broader political support, the Netherlands reconfirms its commitment to a
substantial structural consolidation package of 6 billion euro (1 percent of GDP).
The government is convinced that, in the light of the current economic situation,
the 6 billion euro package is an effective and correct implementation of the
recommendations within the framework of the excessive deficit procedure.
An analysis of the Netherlands Bureau for Economic Policy Analysis (CPB) indicates
a very limited impact on the macroeconomic figures in the medium term. Hence,
the macroeconomic scenario as presented in the 2014 Draft Budgetary Plan still
contains the most comprehensive and up to date forecast for the Dutch economy.
Yours sincerely,

Jeroen Dijsselbloem
Minister of Finance of the Netherlands
Page 1 of 2

Financial and Economic
Policy Directorate

Addendum table 5a Draft Budgetary Plan
Table 1: Di scre tionary me asure s taken by Ge ne ral Gove rnme nt
% GDP
Target
(Expe ndi ture
/Reve nue
compone nt)
ESA Code
Measure s
He alth care
Healthcare Agreement
Reversal of transfer of health conditions with low impact to supplementary
insurance
Healthcare benefit based on average healthcare cont ributions, including group
contracts
Medicines
Limitation of t he special facility (for chronically ill)
Miscellaneous
Social se curity
Phased introduction of household benefit
General child benefit (differentiation of benefits by child’s age is maintained)
Miscellaneous
Ce ntral gove rnment budge t
Reduction in scope for salary increases in public sector in 2014, excl. healt h
care (increasing salaries at expense of fringe benefits)
Price adjustment 2013 (adjusted for net general changes)
Price adjustment 2014
Education quality (and innovation)
Miscellaneous
Taxes and contributions

D.63p
D.63p
D.62p
D.62p
D.62p
D.63p
D.62p
D.62p
Several

D.1p
Several
Several
Several
Several

Fiscal advantage when full entitlement of annuities is redeemed in 2014

D.5r
D.5r
Reduction income tax rat e box 2
(households)
Abolition of fiscal advantage for new rights annuities
D.5r
Freezing tax brackets and tax credits and cancellation of the general levy rebate D.5r
phase out for incomes falling in the top bracket
(households)
Retention of business-related revenue envelopes
Several

Extension of employer’s levy on high incomes (crisis levy)
Earlier increase in employed person’s tax credit
Cancelling cut backs on the self-employed person's tax reduction
Abolition of VAT integrat ion levy and reduced VAT rate on the rebuilding,
renovation and repair of owner-occupied dwellings (including t he expenses of
architects and gardeners)
T he Chronically Ill and Disabled Persons Allowances (including the
‘Compensat ion of specific health care expenses Act ’)
Cancellation of income-related excess and phasing out of general t ax credit
T ax and contributions reduction for businesses
Reduction of the t ax rate of t he first bracket
Miscellaneous
Energy Agre e me nt
Measures Energy Agreements
O the r
Spending shift s involving development cooperation revolving fund, nature
management and security
Ex ante impact of Municipalities Fund/Provinces Fund
T OT AL

D.29r
(corporations)
D.5r
(households)
D.5r
(households)

Our reference
AFEP 2013 345

Adopti on
Status

2013

2014

2015

2016

0,0

0,0

-0,1

-0,1

0,0

0,0

0,2

0,2

0,0

-0,1

-0,1

0,0

0,0
0,0
0,0

-0,1
0,0
0,0

-0,2
-0,1
-0,1

-0,2
-0,1
-0,1

0,0
0,0
0,0

0,0
0,0
0,0

-0,1
0,0
-0,1

-0,2
0,1
-0,1

0,0

-0,1

-0,1

-0,1

0,0
0,0
0,1
0,0

-0,1
-0,1
0,0
0,0

-0,1
-0,1
0,1
0,0

-0,1
-0,1
0,1
0,0

0,0

-0,2

0,0

0,0

0,0

-0,2

0,0

0,0

0,0

-0,1

-0,1

-0,1

0,0

-0,2

-0,1

-0,1

0,0

-0,1

-0,1

-0,1

0,0

-0,1

0,0

0,0

0,0

0,1

0,0

0,0

0,0

0,0

0,1

0,1

0,0

0,1

0,0

0,0

D.21r
D.5r
(households)
Several
D.611r
D.5r
(households)
Several

0,0

0,0

0,1

0,1

0,0
0,2

0,0
0,1

-0,1
0,1

-0,1
0,1

0,0

0,2

0,0

0,0

0,0

0,0

-0,1

-0,1

Several

0,0

0,0

0,0

0,0

Several
Several

0,0

0,0

0,0

0,0

0,0
0,4

-0,1
-1,0

-0,1
-1,0

0,0
-0,9

Note: the table show s the consolidation package as presented in the 2014 draft budgetary plan (table 5a), including the
adjustments stemming from the additional budget agreement 2014 (of 11 October 2013).

Page 2 of 2