A draft version of the budget was tabled by the government at end of August, with the final version adding almost 500 million kroner of spending after talks with opposition parties who eventually joined the agreement.
The draft budget contained plans to add to spending on areas including climate, psychiatry and the foreign service, as well as green energy transition, education and the courts.
This is now secured after agreement was reached over how a negotiable sum – which reached almost 1 billion kroner in the final agreement – should be spent.
Additional spending negotiated between the coalition and opposition parties includes investment in peripheral areas of the country, and on funding for elderly care, schoolbooks, drinking water and marine habitat among other areas.
The final version of the budget is now set to be voted into law by the parliamentary majority, with only a single party, the Red Green Alliance, not part of the agreement.
Opposition parties – despite being part of the overall budget agreement – have criticised its level of ambition, suggesting the centrist coalition government is too keen to keep the opposition parties on its left and right happy, and that this is preventing it from taking any bold steps.
Some elements of the fiscal plan could nevertheless impact everyday lives of people living in Denmark, including foreign nationals.
A special fund is to be set up under the terms of the agreement to make it easier and cheaper to repair broken down appliances like washing machines and refrigerators instead of having to splash out on new machines.
Some 80 million kroner will be put into the government fund over the next four years, with the hope of boosting circular economy.
“The government and agreement parties want to support a change of culture where circularity, recycling and repairing are raised up to contribute to a reduced climate impact from consumers in Denmark,” the budget agreement states.
Exactly how the plan will work is yet to be determined but it is likely to involve a pool to which business can apply for funding related to circular economy businesses like repair shops. Tax deductions, training in repairs and help accessing spare parts are also potential elements.
The 80 million kroner, which is unlikely to see any spending until late next year, is “a start, but no more than that”, senior consultant in circular economy Sine Beuse Fauerby of the Danish Society of Engineers told news wire Ritzau.
“With 80 million kroner over the next four years we are just out of the starting box, but nowhere near the finish line,” she said.
More homes could be connected to district heating, according to the text of the budget agreement, which extends an existing fund by 150 million kroner in 2024.
The aim of the district heating project is to switch as many homes as possible from free standing heaters powered by fossil fuels like gas onto the district heating networks, improving sustainability as well as supply security.
READ ALSO: Denmark announces major plan to replace gas heating in homes
Electric car owners will find that a tax deduction for zero-emission cars will not drop within the next two years, as had previously been expected.
Currently a bundfradrag (basic deduction) provides a saving for electric car owners when they pay car registration tax or registreringsafgiften.
The deduction had been set to be scaled back but will now remain at the same level from 2023-2025, the agreement states. It will take effect from January 1st next year.
Aside from the negotiated spending, elements of government’s draft budget, which are now secured after Monday’s announcement, include a raised tax subsidy for commuters in rural areas and cheaper ferry tickets on smaller, outlying islands through subsidies to operators.
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