Dec 03, 2019

Danish Government Lands 2020 State Budget Agreement

After several weeks of protracted negotiations, the Social Democratic government and its supporting parties have reached an agreement for the 2020 state budget. Late Monday night, the Danish Minister of Finance Nicolai Wammen presented the state budget agreement, which is supported by Radikale Venstre (the Social-Liberal Party), SF (Socialistic People’s Party), Enhedslisten (the Red-Green Alliance) and Alternativet.

The key elements of the 2020 state budget are:

Foreign Labor
User fees for Danish language courses for foreign workers and students will be discontinued. Also, with this agreement, the government and its supporting parties will expand the so-called ‘setting-up scheme’ (etableringskortordningen) for newly educated foreigners. The scheme is aimed at improving qualified foreigners with Danish diplomas’ access the Danish job market. The scheme will be expanded to include students with a BA or professional BA degree. In addition, students who are currently in relevant positions, can expand the period with one extra year (up for individual assessment). Furthermore, the ‘residency requirement’ (opholdskrav) is discontinued in order to ease the attraction and retention of foreign specialists and Danes who wish to return to Denmark after working abroad. The residency requirement entailed that a person was only eligible for unemployment compensation if he or she resided within EU/EUØ/Switzerland for more than 7 years out of the past 12 years. From February 1, 2020, standard regulations for unemployment benefits will apply for this group.

Brexit Campaigns
The government and its supporting parties will launch various campaigns to brand Denmark as a work location for European labor following Brexit. The campaign will be aimed at skilled labor within industries with a lack of labor. DKK 2,5 m. will be allocated annually in 2020 and 2021.

Increased Staffing in Kindergartens and Nursery Schools
The agreement allocates DKK 1,6 bn. to secure more staffing in kindergartens and nursery schools. By 2025, the goal is to secure one adult per every third child in nurseries and one adult per every sixth child in kindergartens. The resources will be allocating gradually towards 2025. The final details will be negotiated fully in 2020.

Health and Psychiatry
The government and its supporting parties allocate DKK 600 m. annually to increase the number of beds in psychiatry and launch various initiatives to improve conditions for people with mental disorder. From 2021, 1000 more nurses will by hired in the public sector (DKK 900 m. over two years). Also, the price on a pack of cigarettes is increased from around DKK 40 to DKK 60 by 2022.

School and Education
Public schools will receive DKK 275 m. in 2020 (increased to DKK 800 m. in 2023), allowing municipalities to hire more teachers. In addition, the education cap (Danish law limiting access to multiple higher educations) is eliminated from 2020.

Green Future
Funds are allocated to extract farmland, which may help reduce the farming industry’s emissions of greenhouse gases. In addition, the government and its supporting parties establish ‘Denmark’s Green Future Foundation’, which is aimed at financing green and sustainable projects.

Financing the 2020 State Budget
The government and its supporting parties aim to finance the 2020 state budget by:

  • Tripling the fees on plastic bags and disposable tableware
  • Cancel the planned tax relief on employer-paid phones
  • Cancel the planned reduction of the inheritance tax
  • Increase the registration fee (Tinglysningsafgift)
  • Increase fees on betting and online casino gambling
  • Reinstate the registration tax on airplanes
  • Clamp-down on the taxation of company car leasing agreements

Sources: regeringen.dk, TV2, Altinget.dk