The corona crisis may not be over yet, but the emergency support for the economy is. After 1.5 years and about 80 billion euros, the outgoing cabinet is ending the support packages for companies, employees and self-employed people.
As of October 1, the generic subsidies to companies and self-employed people who saw their turnover fall during the corona crisis, write ministers Stef Blok (VVD, Economic Affairs), Wopke Hoekstra (CDA, Finance) and Wouter Koolmees (D66, Social Affairs and Employment). ) Monday in a letter to the House of Representatives. This also means that the exotic abbreviations that the ministers came up with for the NOW wage subsidy, the TVL fixed-cost subsidy and the income support for self-employed people Tozo.
The decision comes at a time when all restrictions have not yet been lifted and there is still a lot of uncertainty about the further course of the pandemic. But according to the cabinet’s economic crisis trio, we have entered a new phase, now that many people have been vaccinated and the virus is likely to remain for a long time. “The economy will therefore have to adapt to the structural presence of the coronavirus,” the three write.
That phase is “long-term and perhaps structural” in nature, Blok said in an explanation, and that is why the cabinet no longer wants to provide support unquestioningly. Blok mentioned the work of travel agencies as an example. “It may take a few years before people can take long journeys again. Then you can’t expect the taxpayer to continue to match that.”
Continuing with the aid would also hinder the economic recovery, according to the ministers. This is particularly evident in the labor market. Some companies there are eager for staff, while there are also people with a NOW wage subsidy who are partly at home. “Job retention in one sector can hold back growth in another,” the trio writes.
Also read: Despite doubts, emergency aid was extended in May
Due to the strong economic recovery, the economists of the Central Planning Bureau advised in mid-August to stop the emergency aid. This hinders normal economic dynamics, with employees changing profession more quickly if another sector offers more prospects, the CPB has said since April.
The three ministers now adopt that reasoning. “The time has come when the aid has not only become superfluous, but is even counterproductive,” said Hoekstra. This will irrevocably lead to more bankruptcies in ailing sectors, but could actually help sectors that are looking for personnel on their way.
With extra money, the government wants to make it easier for people to retrain for other work.
Exception for night catering
The cabinet makes one exception, which applies to nightclubs and discotheques. Both are now closed. And if they are not allowed to open after October 1, there will be a separate compensation scheme.
The ministers warn in advance: such a specific subsidy is very complex and ‘demands a lot from implementing organisations’. That is why the ministers are still investigating what is possible.
The ministers announced at the end of June that the support would stop in October, but in recent weeks there have been calls from various sectors to continue: from the travel and conference sector, for example, from the events sector and from the catering industry. This week, Schiphol Airport asked for an additional 40 million euros in support in the coming six months.
But the time of large, structural support packages is really over, the three ministers swear. Only companies with a state shareholding, such as KLM and NS, have a chance of receiving separate treatment. The government has a “different responsibility there”, according to Hoekstra. Other companies, the message is, have to stand on their own two feet again.
For that reason, the option for entrepreneurs to apply for tax deferral will also be canceled after 1 October. Since the start of the crisis in March 2020, 369,000 entrepreneurs have applied for a postponement for more than 40 billion euros. Half of that has now been repaid.
For the 270,000 entrepreneurs who still have to repay part of their tax debt, the cabinet wants to remain lenient. They do not have to start paying back to the tax authorities until October next year, and they are given five years to do so.
The cabinet is still examining whether part of the tax debt can be forgiven for certain entrepreneurs. Hoekstra did not want to say anything about that on Monday.
A few smaller schemes for companies will continue to exist, such as the special guarantee loans that were set up in the context of corona.
For the self-employed, the regular assistance for the self-employed is becoming more flexible. Municipalities do not have to do an asset test this year. The separate guarantee scheme for the events sector will also continue to exist this year.