It was a bit of a shock at the end of April. Due to all the extra expenditure and subsidies due to the corona crisis, the budget fell deeply into the red: no less than 92 billion euros fell short of the cabinet, minister Wopke Hoekstra (Finance) estimated when the spring bill was published.
It now appears that the deficit is likely to be much lower. After a new macroeconomic estimate, the cabinet now comes to EUR 24 billion less.
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Giant difference
There are several reasons for the gigantic difference. One is that the ministry made a ‘very rough and clumsy sum’ in April, explains spokesman Karen Zandbergen. Today’s amount has been calculated a lot more thoroughly, partly because more is known, she continues. According to her, comparing the amounts is of little use, because they have been created in such a different way.
Today’s estimate, for example, has calculated the effect of the VAT exemption for mouth masks, the support package for KLM of 3.4 billion euros and the corona crisis on tax revenues. Consumers spend less, so less tax is paid.
Procrastination is not an adjustment
That tax income also explains the big difference in another way. In the 92 billion euro budget deficit, the ministry had taken into account that income is missing because companies can get a tax deferment if they want to because of the corona crisis.
However, the majority of these taxes still come in later on. Most of all, because of the $ 31 billion in taxes that companies will apply for postponement this year, $ 4 billion is unlikely to return due to businesses going bankrupt, the ministry expects. But 27 billion euros will still end up in the treasury in the coming years, so the ministry no longer counts them now.
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Years of surplus
Incidentally, the budget deficit with the EUR 64 billion is still enormous. Before the corona crisis broke out, our country had a budget surplus four years in a row.
For example, at the end of 2019 there was still some 14 billion euros in the treasury. That was reason for the IMF to tap the Netherlands like Germany at the end of last year: according to the IMF, both countries had to spend more money to stimulate economic growth.
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