There will be a second emergency package to keep the Dutch economy as good as possible in the corona crisis. Some schemes are extended in the months of June, July and August, although the course is shifted from speed to targeted economic interest. What can we expect?
The first emergency package expires this month. Currently 2.1 million employees and entrepreneurs use some form of state aid, said minister Wouter Koolmees (Social Affairs and Employment) on television on Friday On 1.
Koolmees is working together with ministers Wopke Hoekstra (Finance) and Eric Wiebes (Economic Affairs) on a new package that is expected to be presented within two weeks.
The first package had to be assembled with steam and boiling water due to the acute emergency. Speed was more important than customization.
Subsidies for wage costs, a social assistance scheme for the self-employed and an amount for entrepreneurs to pay the fixed costs had to keep up work, income and business activities as much as possible.
The crisis has lasted longer than expected and that has consequences, Koolmees warned. “That this crisis will have no effect on companies and on employment is of course a fairy tale.”
No bonuses and dividend payments on government support
Entrepreneurs with a loss of at least 20 percent in turnover are reimbursed part of the salaries of the government (the NOW scheme). If the turnover falls completely, a maximum of 90 percent of the salaries will be reimbursed. One of the conditions is that no personnel may be fired during that period.
That is going to change, Koolmees said on Friday. Businesses need to be given room to restructure, which is why layoffs during state aid are now allowed. “We have entered a different phase,” said the minister.
On the other hand, companies are not allowed to pay bonuses and profit distributions and it is forbidden to buy back own shares if the government pays part of the salaries.
An additional scheme will be introduced for flex workers. This group is not eligible for public support if their contract is not renewed, while employers are not obliged to keep it on staff. The entire House of Representatives asks the cabinet to draw up a “temporary, enforceable regulation”.
Targeted compensation for fixed costs for companies
For many companies, salaries are not the only cost. The rent, energy costs, software contracts and investments continue as normal. That is why the Hague is discussing a way to accommodate entrepreneurs who are hit hard by the corona crisis.
The cabinet prefers to present the most targeted measure possible, instead of transferring all entrepreneurs the same amount as was done in the first package (the TOGS scheme). Entrepreneurs received 4,000 euros to pay the fixed costs of three months, such as the rent. Very welcome for sole traders, but for large companies a drop on a glowing plate.
Taking over all operating costs is not possible, so a percentage must be considered. The height of this and which sectors qualify for this is a big puzzle that has yet to be laid.
The economic interest is paramount for the cabinet. That does not mean that blank checks are distributed, but the costs are now secondary to the goal of keeping companies afloat.
Social assistance benefit and tax deferral possible back in second emergency package
The self-employed without personnel can apply for social assistance benefits (TOZO scheme) if their income is lost due to the crisis. The conditions are set out broadly, no account is taken of equity or that of the partner. It is also not important whether the company has any chance of surviving the crisis at all.
To date, 340,000 freelancers have made use of this. It is obvious to leave this measure intact for the most part, sources in The Hague report. According to various self-employed organizations, extension of the package by three months is in any case “urgently needed”.
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