Danish Government Presents its 2025 Plan

On May 30, the Danish V-LA-K government represented by Minister of Finance Kristian Jensen, Minister of Business Brian Mikkelsen and Minister of Economic Affairs and the Interior Simon Emil Ammitzbøll presented its 2025-plan.

The plan is expected to form the basis for the upcoming negotiations on the national budget and tax reform. The main goal of the 2025-plan is to increase the government’s economic buffer by DKK 15 billion in 2025, which will finance tax cuts and public investments.

Main points in the government’s 2025-plan

Overall Economic Priorities:

  • Increase the government’s economic buffer from 35.6 billion to DKK 50.6 billion by 2025
  • Funding will be procured by initiating various reforms
  • The plan projects an increase in public spending of 0.3 pct. in 2018-2025
  • In the period between 2021-25, the government seeks to earmark DKK 22 billion towards public investment projects.

Tax Cuts:
The government also intends to spend a considerable part of the increased economic buffer on tax cuts within three main areas:

  • Lower tax rate for people in lower income brackets
  • Reduce the number of people paying the top tax rate
  • Reduce business and corporate tax rates

Increasing employment:
The Government aims to increase employment by 55 to 60,000 people via five initiatives:

  • Young people will enter the job market earlier: The government will initiate a state education grant (SU) reform, which is expected to increase employment by 10,000 people
  • Fewer people will receive welfare benefits : Tax cuts will increase the incentive to be employed rather than receive public welfare, which will increase employment by 20,000 people.
  • Danes will stay longer on the job market: It will become more attractive for Danes to stay longer on the job market, which will increase employment by 5-10,000 people
  • Danes will work more: The government will present initiatives that will incentivize Danes to work more hours, which will increase employment by 10-15,000 people
  • International Recruitment: Recruitment of highly qualified labor to Denmark will increase employment by 5,000 people.

Source: VLAK-government 2025-plan “Vækst og Velstand 2025” (translation from Berlingske excerpt)

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