“Not much more than symbolic, a drop in the ocean”, is how Tomas Bleker, energy specialist at price comparator Pricewise, describes the measure.
It is not yet known how the 375 million euros for households will be spent, he says, but he thinks that because of the simplicity it is chosen to give more discount on the energy tax.
A tax reduction has been introduced through the ‘energy tax reduction’ because politicians regard part of the energy consumption as a basic need. You do not pay tax on this.
If the tax reduction will be the same for everyone, that amounts to approximately 46 euros per household per year for the current more than 8 million households.
‘Not effective and not enough’
“The money therefore also ends up with consumers who have no problems paying their energy bills. That makes the scheme less effective. And for the Dutch who do need the money, it will not be enough,” says Bleker.
Higher taxes and rising energy prices
Pricewise previously calculated that the energy tax will be about 16 euros higher in 2022 than in 2021. “That doesn’t seem like much, but it comes on top of rising energy prices.”
The ‘energy tax reduction’ for 2021 is 461 euros per household, regardless of whether you use both gas and electricity, or only electricity. It was announced on Budget Day that this amount will be increased by 1 euro next year. “But I suspect that there will be something more,” says Bleker.
The decision to reduce the energy tax by 375 million euros comes after research institute TNO announced in a report yesterday that there are 550,000 households in the Netherlands that are struggling to pay their energy bills due to rising gas prices. They say that number could rise in the near future.
Lately there has been concern about rising energy prices. More than half of the Dutch are concerned about the rapidly rising energy prices, it appeared last week.
‘Insulation is the solution’
“I can understand that politicians will do something about the concerns about rising gas prices, but that is only temporary. The solution is to make homes more sustainable,” says Peter Mulder, senior scientist and one of the authors of the TNO report.
“Betting on more isolation seems more logical”, agrees ING economist Marten van Garderen.
“More money is needed, also to improve cooperation between organizations and to share knowledge in the field of insulation. Then not all housing associations have to reinvent the wheel themselves,” says Mulder. “Many homes of a certain type are the same, whether they are in Groningen or Breda. There are just different owners.”
The Italian government is also allocating money to help households now that energy prices are rising. It is more than 3 billion euros. This will help more than 5.5 million low-income consumers and about 6 million SMEs.
If no measures are taken, electricity prices will rise by 40 percent in the coming quarter and gas prices by 30 percent, Reuters news agency reported.