2019: a substantial surplus, investment and lower taxes
We are currently in the midst of a crisis, with government borrowing hitting historic highs in an effort to support the economy. This follows on from a historically rare occurrence of an altogether different kind, namely successive years of budget surpluses. These surpluses reached their peak in 2019, when revenue exceeded spending by 14 billion euros. Thanks to that surplus, the national debt fell in 2019 to 48.6% of gross domestic product.
These figures are contained in the central government annual financial report and the annual reports of the individual ministries, which finance minister Wopke Hoekstra is sending to the House of Representatives today – on Accountability Day.
In these annual reports the government reviews revenue and expenditure in 2019 and sheds light on the various ministries’ spending. In its response to the annual reports, the Court of Audit will today indicate whether the money went where it was intended to go, and what can be improved.
‘In the knowledge that many self-employed people, employees and business owners are striving with all the ingenuity they can muster to keep their heads above water at this time, we can look back at 2019 as a year of great prosperity,’
said Mr Hoekstra.
‘Many people found jobs, teachers were awarded further pay rises, taxes were reduced and a lot of money was invested in security and the climate.’
Rates of pay under collective labour agreements went up by 2.5% in 2019 compared with 2018, but inflation, at 2.6%, rose slightly more. Purchasing power grew by around 1% on balance, partly due to a reduction in taxation and social insurance contributions. A record number of people were in work in 2019. There was scope both to reduce the national debt and to invest further and cut taxes.
Last year the government set aside extra money to bring down nitrogen emissions and for climate measures, education and security. At the same time, it received less money due to the accelerated phasing out of natural gas extraction in the province of Groningen. As in previous years, not all the money that was allocated was actually spent. This is due, among other things, to the government’s ambitious investment plans, combined with favourable economic conditions and a tight labour market. The underspend for 2019 amounted to 1.8 billion euros. Most of this money will remain available for future years.
List of all annual reports
See all annual reports of the individual ministries and other reports (in Dutch) on Rijksoverheid.nl.