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What Denmark's new budget proposal means for foreign residents

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What Denmark's new budget proposal means for foreign residents
Minister of Finance Nicolai Wammen presents the 2020 budget proposal on Wednesday. Photo: Niels Christian Vilmann/Ritzau Scanpix
16:51 CEST+02:00
The new Social Democrat government presented its first budget proposal on Wednesday. We take a look at elements which could be particularly relevant for foreign residents.

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Welfare and education

The government wants to invest 5.4 billion kroner on welfare and education in 2020.

Much of this (3.7 billion kroner) is already set aside in pre-existing agreements with regional health authorities and municipalities, but some other specified areas of spending were set out during Wednesday’s budget presentation.

These include spending on training and hiring up to 1,000 new nurses from 2021, with the outlay to this end beginning at 300 million kroner in 2020.

700 million kroner will be spent rolling back a policy of the previous government, known as omprioriteringsbidraget, which imposed major spending cuts on universities. Speculatively, freer budgets at higher education institutes could be good news for highly skilled foreign specialists or even international students.

Of 2.1 billion kroner set aside for spending on welfare, a pledge has been made for spending on minimum staff-child ratios (minimumsnormeringer) at kindergartens, although the exact details of this have been left open for negotiation with the government’s allied left-wing parties, who must also vote for the final budget in parliament. Both the Social Liberal and Socialist People's parties want at least 500 million kroner to go towards this in 2020, Politiken reported on Thursday.

Law and order, including tax avoidance

1.2 billion kroner will be spent on the police force and prosecution service in 2020, with 1.5 billion to be spent revamping the struggling tax authority. Here, 150 million kroner is set aside for a new tax centre with 250 staff who will be tasked with “aggressive taxation planning” and preventing tax avoidance.

The tax authority plan come in the wake of a major international tax avoidance scandal that has left the Danish state an estimated 1.7 billion kroner out of pocket.

Tax on work phones and inheritance, tobacco to cost more

The government intends to make savings on a number of areas in order to finance the welfare spending. These include scrapping a rule which made mobile phones provided by employers tax-deductible.

Additionally, a rollback of rule changes lowering tax on inheritance will save the government a billion kroner, according to the budget.

Another area in which the government plans to bring in money is the price of tobacco. Although it has been criticized by other parties for not going far enough, the 10 krone hike on a packet of cigarettes will boost state funds by 350 million kroner in 2020.

Several other rollbacks on changes planned by the previous government were also announced. Prominent amongst these is a reduction in state subsidies to private elementary schools (friskoler in Danish, including international friskoler), although other parties on the left have said they are against this.

Scrapping the contentious deportation facility for ‘unwanted’ migrants on the island of Lindholm will save 253 million kroner, the budget states.

These measures aside, the government says it will draw 2.3 billion kroner from the so-called råderum (surplus or available sum) in state finances, in order to increase spending.

Sources: Ministry of Finance, 2020 budget proposal.

READ ALSO: Danish government makes welfare, climate pledges in 2020 budget proposal

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