Editing Economy of the Netherlands (section)

==Government==
While the private sector is the cornerstone of the Dutch economy, governments at different levels have a large part to play. Public spending, excluding social security transfer payments, was at 28% of GDP in 2011.<ref>{{cite web|url=http://data.worldbank.org/indicator/NE.CON.GOVT.ZS|title= General government final consumption expenditure (% of GDP)|publisher=[[World Bank]]|access-date=7 April 2013}}</ref> Total tax revenue was 38.7% of GDP in 2010,<ref>{{cite web|url=http://www.oecd-ilibrary.org/taxation/total-tax-revenue_20758510-table2|title=Total tax revenue as percent of GDP|publisher=[[OECD]]|access-date=7 April 2013}}</ref> which was below the EU average.<ref>{{cite web|url=http://appsso.eurostat.ec.europa.eu/nui/show.do?wai=true&dataset=gov_a_tax_ag2|title=Main national accounts tax aggregates|publisher=[[Eurostat]]|access-date=7 April 2013}}</ref> In addition to its own spending, the government plays a significant role through the permit requirements and regulations pertaining to almost every aspect of economic activity. The government combines a rigorous and stable microeconomic policy with wide-ranging structural and regulatory reforms. The government has gradually reduced its role in the economy since the 1980s. Privatization and deregulation is still continuing. With regards to social and economic policy, the government cooperates with its so called [[social partner]]s ([[trade union]]s and [[employers' organization]]s). The three parties come together in the [[Social-Economic Council]] (‘Sociaal Economische Raad’), the main platform for [[social dialogue]].

=== Social security system ===
The Dutch social security is very comprehensive and multi-faceted,{{clarify|date=December 2024}} and is divided into the national security (''[[:nl:Volksverzekering|Volksverzekering]])'' and the employee insurance (''[[:nl:Werknemersverzekering|Werknemersverzekering]]).'' Whereas the first covers all living in the Netherlands and the social benefits provided, the latter provides employment-related benefits.<ref name=":2">{{Cite web|url=http://ec.europa.eu/employment_social/empl_portal/SSRinEU/Your%20social%20security%20rights%20in%20Netherlands_en.pdf|title=Your social security rights in the Netherlands|date=2013|website=Ec.europa.eu|access-date=4 January 2018}}</ref> All living in the Netherlands are required to pay into the social security system, including residents from outside the Netherlands, with a few exceptions.<ref name=":3">{{Cite web|url=https://www.svb.nl/int/en/|title=SVB home - SVB|last=Verzekeringsbank|first=Sociale|website=Svb.nl|language=en|access-date=5 December 2017|archive-date=24 May 2019|archive-url=https://web.archive.org/web/20190524102521/https://www.svb.nl/int/en/|url-status=dead}}</ref>

The Volksverzekering is compulsory for all and covers the residents under different forms of national insurance:<ref name=":02">{{Cite news|url=https://www.expatica.com/nl/living/gov-law-admin/social-security-in-the-netherlands-100578/|title=Social security in the Netherlands|access-date=27 June 2022|language=en}}</ref><ref name=":1">{{Cite book|title=Social Welfare in Developed Market Countries|last=Roebroek|first=Joop M.|publisher=Routledge|year=2016|isbn=9781317366775|editor-last=Dixon Scheurell|editor-first=John Robert P.|pages=147–189}}</ref>
* [[Healthcare in the Netherlands|Long-term care]] under the Long-Term Care Act (''Wet Langdurige Zorg (WLZ)) (''formerly known as The Exceptional Medical Expenses Act (Algemen Wet Bijzondere Ziektekosten ([[AWBZ]])))
* [[Pensions in the Netherlands|Pension care]] under the General Old Age Pensions Act (''[[Algemene Ouderdomswet]] (AOW))''
* Survivor benefits under the General Surviving Relatives Act (''[[:nl:Algemene nabestaandenwet|Algemene nabestaandenwet]]( ANW)) (formerly known as  ''The General Widow's and Orphans’ Act (Algemene Weduwen-en Wezenwet (AWW)))
* [[Family policy in the Netherlands|Child benefits]] under the General Family Allowances Act (''[[:nl:Kinderbijslag (Nederland)|Algemene Kinderbijslagwet]] (AKW))''
It is overseen by the Social Insurance Bank (''[[:nl:Sociale Verzekeringsbank|Sociale Verzekeringsbank]] (SVB))'' and financed through earning-related contributions of employers and employees up until a maximum income-ceiling. Whilst employed persons get their contribution deducted automatically from their wage, the unemployed pay by themselves. The AKW is financed by employers, whereas the AOW is financed by the employees. The AOW, additionally, is financed by a small government subsidy.

The ''Werknemersverzekering'' is compulsory for all employed people within the Netherlands. It includes the coverage of employees in the following areas:
* [[Unemployment benefits]] under the Unemployment Insurance Act (''[[:nl:Werkloosheidswet|Werkloosheidswet]] (WW))''
* [[Sick leave]] under the Sickness Benefits Act (''[[:nl:Ziektewet|Ziektewet]] (ZW))''
* Disability benefits under the Disablement Insurance Act ([[:nl:Wet werk en inkomen naar arbeidsvermogen|''Wet werk en inkomen naar arbeidsvermogen'']] ''(WIA))''
The financing for the ''Werknemersverzekering'' is automatically deducted from the employee's income by the employer.<ref name=":02" /><ref name=":1" />

==== Unemployment benefits ====

===== Coverage =====
The unemployment benefits in the Netherlands, as set out under the WW, covers almost all employees, that are employees based on a working-contract. Excluded from the WW are the following: self-employed, nationally employed, persons working less than four days a week, heads of stockholders and voluntary workers that earn up to €150 per year.<ref name=":2" /><ref name=":1" />

===== Right to benefits =====
To profit from the benefit the unemployed has to submit an application to the Employee Insurance Agency (''Uitvoeringsinstituut Werknemersverzekeringen (UWV))'' within one week of becoming unemployed and additionally has to register as job-seeker. The WW only covers employees with a sufficient work history,  meaning that an applicant has to have been working for at least 26 weeks in the past 36 weeks before becoming unemployed. If so, the working-weeks requirement is met. Moreover, the employee is only eligible to unemployment benefits if the unemployment has not been due to his own fault (e.g. own termination of the job contract).<ref name=":2" /><ref name=":1" />

===== Benefits =====
The benefits received through the WW are earnings-related and amount to 75% of the previous daily earnings (based on 5 working days per week) for the duration of two months. After those two months the benefits reduce to 70%. Part-time work is taken into account with a calculation of parts of the working hours.{{clarify|date=December 2024}} If this benefit is less than the minimum income, the benefit can be supplemented under the Additional Allowances Act (''Toeslagenwet''). If there has been a change of employment, all jobs in the previous twelve months are included in the calculation of the benefits. To continue to receive benefits, the individual needs to be actively looking for work. Moreover, one needs to participate in e-coaching three and twelve months after the start of unemployment. After one year of unemployment one must register with an employment agency.<ref name=":3" /><ref name=":1" /><ref name=":02" />

===Controversial issues===
====Labour market and social welfare====
The Dutch labour market has relatively strict regulations for employers on firing employees, although by June 2014 the [[House of Representatives (Netherlands)|House of Representatives]] has agreed to loosen these regulations.{{update inline|date=October 2018}} Due to the costs of employees and costs of firing them, a large part of the working force (about 15% of the working force) is an independent one person company (ZZP).  They are independent and get paid by delivery without higher social costs.{{clarify|date=October 2018}} Another big part of the workforce is hired as temporary workforce. State unemployment benefits in the form of a 70% benefit of the employee's last-earned salary for up to three years (with a maximum of roughly 2500 euros per month) are available for fired employees, provided that they have worked for a certain minimum time period, usually 26 weeks. Moreover, the self-employed individuals (zelfstandigen zonder personeel (ZZP)) are not automatically covered under the ''Werknemersverzekeringen'', and are not obligated to enroll into unemployment, sickness or disabilities insurance. Self-employed individuals are therefore required to enroll themselves with private insurance companies.<ref name=":02"/><ref>{{cite web|url=http://www.oecd.org/els/soc/34004969.pdf|title=OECD - Social Policy Division - Directorate of Employment, Labour and Social Affairs : Country chapter - Benefits and Wages : The Netherlands|date=2002|website=Oecd.org|access-date=4 January 2018}}</ref>.  The Dutch Government is however, working hard to combat bogus self-employment by applying significant changes and tightening of rules under Wet Deregulering Beoordeling Arbeidsrelaties (DBA).  <ref>https://www.darwinrecruitment.com/new-dutch-legislation-the-impact-of-freelancers/</ref>.

====Age of retirement====
Under the [[Algemene Ouderdomswet|AOW]] (General Old Age Pensions Act) of 1956, every Dutch citizen was entitled to a state pension from the age of 65. However the act was amended in 2012 to increase the pension age in several stages up to 67 in 2024. Married couples and those who live together receive 50% of minimum wage per person, and a single person receives 70% of minimum wage. Most (about 70%) earn an extra pension from private pension funds. Employees are obliged to participate in the sector pension funds.{{clarify|date=October 2018}} The total amount of pension funds at the end of 2009 was some 664 billion euro and by the end of 2019 this had increased to 1560 billion euro, for a population of just over 17 million. Employees receive on average about 70% of their final salary. During the economic crisis{{which|date=October 2018}} and because of low interest rates, pension funds have had difficulty keeping up with inflation.

==== Inequality and redistribution====
With a [[Gini coefficient]] of 25.1 (2013) the income inequality is relatively low in the Netherlands. However, the inequality when measured in distributions of household wealth is high, where the top 1% owns 24% of all net wealth, and the top 10% own 60%. Moreover, rather large wealth disparities persist in the Netherlands in relation to age, where those under 35 years-of-age own 10% as much as older workers. This is a consequence from the low taxation of home ownership and a generous [[Home mortgage interest deduction|mortgage interest deductibility]], which benefit the wealthier households.<ref>{{Cite web|url=https://www.oecd.org/netherlands/OECD2015-In-It-Together-Highlights-Netherlands.pdf|title=In It Together Why Less Inequality Benefits All... in the Netherlands|date=2015|website=Oecd.org|access-date=4 January 2018}}</ref> Due to the generous pensions the pension-related savings are the most important part of wealth in the Netherlands, yet are not subject to capital income taxation, which increases the inequality. The taxation comes as income tax when the saved pension is paid out. People having earned minimum wages only, will not build up any pension. The idea behind a pension is to have a net income after retirement that is comparable to before retirement. The AOW, the Dutch retirement law, guarantees an income up to 70% of minimum wage per person. Therefore, only people earning more than minimum wage need to save to ensure comparable income after retirement.

==== Home mortgage interest deduction ====
The Netherlands was{{when|date=October 2023}} one of the few countries in the world where the interest paid on mortgages is almost fully deductible from income tax. Since 2013 big changes were made. The conditions allowing a borrowing of more than 116% of the value of the home were reduced to 106% and are still continuously being reduced every year. The deduction is also capped to 50.5% and reducing every year.<ref>{{cite web|title=Tariefsaanpassing aftrek kosten eigen woning|url=https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/woning/uw_hypotheek_of_lening/tariefsaanpassing_aftrek_kosten_eigen_woning/tariefsaanpassing_aftrek_kosten_eigen_woning|website=Belastingdienst|access-date=15 May 2017|archive-url=https://web.archive.org/web/20170131120755/http://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/woning/uw_hypotheek_of_lening/tariefsaanpassing_aftrek_kosten_eigen_woning/tariefsaanpassing_aftrek_kosten_eigen_woning|archive-date=31 January 2017|url-status=dead}}</ref> Together with the after-effects of the [[Great Recession]] the result was a housing crisis, with a decrease of prices almost 25% percent in some areas. Recent years have shown a recovery of 10% to even 20% per year in the most popular cities.

The Service sector accounts for more than half of the national income, primarily in transportation, distribution and [[logistics]], financial areas, software development and the creative industry. The breadth of service providers in financial services has contributed to the Netherlands achieving a [[Division for the Advancement of Women|DAW]] Index score of 5 in 2012. Industrial activity is dominated by the machinery, electronics/high tech industry, metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 6% of GDP. Agriculture and fishing, although visible and traditional Dutch activities, account for just 2%.

The Netherlands continues to be one of the leading European nations for attracting foreign direct investment and is one of the five largest investors in the United States. The economy experienced a slowdown in 2005, but in 2006 recovered to the fastest pace in six years on the back of increased exports<ref>{{Cite web|title=Netherlands Business Overview|url=https://bizpages.org/countries--NL--Netherlands|url-status=live|archive-url=https://web.archive.org/web/20200420173355/https://bizpages.org/countries--NL--Netherlands |archive-date=20 April 2020 }}</ref> and strong investment. The pace of job growth reached 10-year highs in 2007. The Netherlands is the fifth-most competitive economy in the world, according to the [[World Economic Forum]]'s [[Global Competitiveness Report]].<ref name="wefcomp">{{cite web|url=http://www.weforum.org/issues/global-competitiveness |title=Global Competitiveness Report 2012–2013 |publisher=World Economic Forum |date=5 September 2012 |access-date=11 June 2013 |url-status=dead |archive-url=https://web.archive.org/web/20141210040419/http://www.weforum.org/issues/global-competitiveness |archive-date=10 December 2014 }}</ref>