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Dutch king: 2023 budget contains ‘unprecedented’ measures to combat cost of living crisis

AMSTERDAM (Reuters) -A “painful” cost of living crisis triggered by the war in Ukraine is hitting the Netherlands and the government plans an “unprecedented” package of measures aimed at restoring purchasing power, Dutch King Willem-Alexander said on Tuesday.

The king gave his annual budget day address in front of a full audience in The Hague for the first time since before the COVID-19 pandemic.

The 2023 budget announcement comes as soaring prices threaten to push a million of the Netherlands’ 17.7 million population into poverty.

“The consequences for people, families and companies are severe,” the king said in his speech outlining the government’s spending plans. “It is painful that an increasingly greater number of people in the Netherlands are having trouble paying rent, groceries, health insurance and energy bills.”

In response to the hardship facing so many, the government has prepared an “unprecedented” package of 18 billion euros ($17.94 billion) worth of measures aimed at restoring purchasing power, the king said.

Prime Minister Mark Rutte’s government has been negotiating a price cap with dozens of power suppliers to shield households from surging gas and electricity prices, but the details have not been finalised.

The price cap would come in addition to government plans to spend around 16 billion euros ($16 billion) in 2023 to compensate rising costs for energy and food, which were also to be detailed on Tuesday.

These expenditures, which include a 10% increase of the minimum wage and higher income-related subsidies for health care and rent, will be mainly covered by hiking wealth and corporate taxes.

It comes as an opinion poll by research bureau I & O published on Monday found Rutte’s government has fallen to a record low approval rating. Nearly 80% of 2,684 people questioned said they disapprove of his handling of the energy crisis, among other issues.

Dutch inflation hit 12% in August, according to Statistics Netherlands, driven largely by a 151% year-on-year leap in gas and electricity prices.

The Netherlands Bureau for Economic Policy Analysis (CPB), the government’s leading policy analysis agency, has warned that up to a million people are at risk of slipping into poverty due to surging prices.

($1 = 1.0034 euros)

(Reporting by Anthony DeutschEditing by Raissa Kasolowsky)

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