The Central Planning Bureau calculated today that the average Dutch person will deteriorate by four percent in 2023 and that the hardest hit will fall on the working population. DENK party chairman Farid Azarkan calls the drop in purchasing power “painful”: “Next year we would have to compensate a little for what we will lose in 2022”.
“Indeed, Social Affairs Minister Karien van Gennip has said that 2023 will be another difficult year,” said political journalist Sophie van Leeuwen. “Workers will be hit hardest because they have to ‘be able to handle it,'” said Van Gennip. They receive the minimum compensation for purchasing power.’
Van Leeuwen also claims that Van Gennip actually takes the CPB’s advice immediately to honor the temporary nature of the price cap. ‘Certainly also because the price of gas will remain high for a while, the measure cannot apply forever, says Van Gennip,’ says Van Leeuwen.
Painful
And this creates a painful situation, says DENK party chairman Farid Azarkan. “My first reaction is mostly ‘ouch!'” he says. “We did not anticipate this loss of purchasing power. Perhaps for 2022, but for 2023 we should have a plus of 3.8 percent. Next year we should have compensated a little for what we lost in 2022’.
While Azarkan is surprised, he’s partly not. ‘The figures the Cabinet used to calculate on Prinsjesdag were simply not realistic. You can’t count on 2.9% inflation next year. It will be only 7 or 8 percent, it cannot be otherwise».
Azarkan points out that a 4% drop in purchasing power is extremely painful, even if he can somehow understand it. “I understand you can’t say you won’t compensate everyone,” he says. And certainly not in this way. But on the other hand, we have to accept that citizens with the same income can spend much less money.’
Exit strategy
He therefore criticizes the strategy of continued implementation of temporary measures. “You always have the option of using cut and paste and other measures that we’re not trained to fix things, but they always need to be phased out,” he says. “That doesn’t help, so you have to look at the structural framework.”
The minimum wage hike was a good start, according to Azarkan, but more could be done. “The job has to pay again, so it’s better to give people more money,” she continues. “When Rutte just became prime minister, you paid 34 cents of every euro you earned to government in any form, but that’s already 40 cents.”
Wage-price spiral
He continues: ‘We had a meeting with De Nederlandsche Bank last week, and the experts see no reason for a wage-price spiral. The reason why inflation is high is mainly due to the use of raw materials, which now affect all facets. Something on which the Dutch bank, by the way, said ‘they can see it working after a year’, but which has been seen erroneously by DNB.’
Azarkan stresses even more that he does not want a wage-price spiral, but wants compensation for citizens. ‘Soon they will be able to buy much less with the same money, and then: what I see and hear is that many companies have already discounted the personnel cost component in their prices, while personnel have not received it. Everywhere I see higher prices, while this cannot be discounted at all because they themselves do not yet have that price increase. So companies make billions in profits and people don’t understand that.’
Source: BNR
Fernando Dowling is an author and political journalist who writes for 24 News Globe. He has a deep understanding of the political landscape and a passion for analyzing the latest political trends and news.
