Declining revenues and higher expenses cause public deficit to grow
Government revenues fell marginally by 0.6 billion euros in the first six months of 2014 relative to the same period last year. Government spending rose by 4.5 billion euros. As a result, the public deficit over the first six months of 2014 grew to 9.4 billion euros, an increase by 5.1 billion euros compared to the first half of 2013. The higher public deficit is mainly due to the fact that the auction of telecom frequencies early 2013 was a one-off event. The public deficit over the period July 2013-June 2014 stands at 3.0 percent of the GDP. By the end of March 2015, Statistics Netherlands will publish the deficit over the entire year 2014. Whether the Netherlands will comply with the EMU criterion will depend on this annual figure.
Public deficit and public debt on an annual basis
Lower yield from natural gas and dividend
Government revenues were marginally reduced by 0.6 billion euros in the first half of 2014 relative to the same period last year. The reduction of 3.7 billion euros was due to lower natural gas revenues and a lower dividend yield. Tax proceeds and revenues from social contributions rose by 3.3 billion euros. Proceeds from VAT, company tax and dividend tax grew substantially. The introduction of the landlord tax and the one-off resolution levy for banks in 2014 also accounted for extra government income.
Public expenses are 4.5 billion euros up from the first six months of 2014, due to the one-off revenue of 3.8 billion euros from the auction of telecom frequencies in 2013, which was – consistent with international agreements – entered in the balance sheet as a negative item of expenditure. If the effect of the one-off revenue from the auction of telecom frequencies is not taken into account, public expenditure has been all but stable since 2010.
Public revenues and expenses on an annual basis
The public debt amounted to nearly 450 billion euros at the end of the second quarter, i.e. 69.6 percent of the GDP.