More households are feeling the pinch. Photo: Depositphotos.com
The government is concerned about the impact of high fuel prices and inflation on purchasing power, but looks to employers to ease the burden by raising salaries, ministers said.
Finance, economic and social affairs ministries met Tuesday morning on the income crisis, with one month to go until the 2023 budget is announced.
“Extraordinary times call for extraordinary measures,” Social Affairs Minister Karien van Genyip told reporters after the meeting. “Most of the measures to restore purchasing power should come from wage increases. It is necessary and there is room for it. increase.
Finance Minister Sigrid Kaag said a salary hike would be a “structural solution” to the problem. “Not everything comes from the government,” she said. It will be difficult to cut taxes in the current tax year, she said, adding, “We’re looking to 2023.”
Cabinet sources told broadcaster NOS that the minister was considering a permanent solution rather than a temporary measure.
pressure
Food prices have risen by almost 20% and inflation remains at record levels, while governments are under pressure to deal with soaring gas prices ahead of winter. The coalition will release his 2023 spending plan on the third Tuesday in September.
The government’s macroeconomic advice group CPB released its latest forecasts on Friday, and these will be used by the Cabinet to determine the direction it should go.
For example, the minimum wage increases by 2.5% annually for three years, but can be increased by 7.5% at once. Income tax could also be reduced, but that would be costly given that just 0.1% reduction from the minimum tax rate would have cost him 400 million euros.
Tax cuts on fuel, electricity and gas that expire in January could also be extended for a longer period, but this would also be costly and conflict with EU rules on state aid. Wealth and corporate taxes can also be brought in.
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