The general government balance and total public debt are the main indicators of the current state of public finances.

Local government deficit of 3 billion euros

Local government had a deficit of more than 3 billion euros in 2024. This deficit is largely at the municipal level; the provinces actually recorded a surplus. In 2023, the preliminary figures for local government show that expenditure and revenues were almost in balance. Most of the government deficit in 2024 was at the level of central government and the social security funds - 9 billion euros all together.

Total public spending up to 500 billion euros

Government spending rose by more than 8 percent in 2024 compared with the previous year. That was an increase of 39 billion euros. The only previous year in which government spending increased by more was 2020, the year in which the coronavirus pandemic began. Government spending has increased by more than 150 billion euros over the past five years. In 2019, the government spent 349 billion, while last year the total amount reached 500 billion. Government spending rose more quickly than GDP grew over the past five years, and therefore it rose as a percentage of GDP - from 42.1 percent to 44.1 percent.

This higher level of public spending was partly due to higher prices, which affect wages, the purchase of goods and services, and social security payments. The decision of the Netherlands’ Supreme Court on the taxation of ‘box 3’ income (which includes income from savings and investments) in the summer of 2024 resulted in 4 billion euros of additional government spending in 2024. At the same time, the end of the energy price cap in 2024 meant that spending decreased by 4 billion euros.

Government revenues increased by 30 billion euros in 2024. Taxes and social insurance contributions constitute nearly 90 percent of government receipts. The vast majority of the increase in revenue - 25 billion euros - also came from these sources. Income tax in particular brought in more revenue in 2024, with an increase of 11 billion euros compared to 2023. Receipts from dividend tax, by contrast, were lower than in the previous year. Due to a change in the rate of taxation for ‘box 2’ income in 2024, directors and major shareholders paid out additional dividends in 2023, which were subject to taxation at the lower 2023 rate.

Debt rose to 492 billion euros, but debt-to-GDP ratio lower

Total public debt amounted to 492 billion euros at the end of 2024. That was an increase of 9 billion euros compared to the end of 2023. The increase was mainly caused by a loan of 13 billion euros granted to the fully state-owned national grid operator, Tennet. The government’s current spending deficit of 12 billion euro had little effect on total public debt. This is because not all expenditure for 2024 was actually paid out in 2024 (such as compensation following the court decision on the taxation of ‘Box 3’ income), meaning that it did not need all to be funded in 2024. Similarly, some of the revenues received in 2024 were actually from previous years (such as dividend tax and repayments for excess subsidies).

As a percentage of GDP, total government debt fell in 2024. This is because GDP grew more quickly than government debt. The debt-to-GDP ratio came in at 43.3 percent, which was 1.9 percent lower than at the end of 2023. Over the past 30 years, the only year with a lower end-of-year debt-to-GDP ratio was 2007.