The package of measures to help companies and freelancers cope with the fallout of the coronavirus pandemic prevented a sharp rise in unemployment but was in place for too long, the government’s macro-economic think-tank CPB said on Tuesday.

About 35% of Dutch companies used at least one of the four main measures – tax deferral, NOW wage subsidy, TVL fixed tax subsidy, or Tozo income support. The hospitality industry and cultural institutions, both of which were impacted by the lockdown, were most likely to do so.

The report says that as the economy recovered and the labour market tightened further, support measures continued to exist and in some cases were extended, reducing their effectiveness.

“Phasing out coronavirus-aid schemes proved difficult partly because of raised expectations among the business community, but also because tightening in the form of more targeted implementation rules proved difficult,” the CPB said.

If similar situations happen again, the CPB said clarity in advance about the scope and duration of measures will help the government to phase out support policies when they are no longer needed. Companies and freelancers, the agency said, should also be encouraged to maintain sufficient financial buffers to absorb new shocks themselves.

By the end of June 2022, the total subsidy package had cost the government €34 billion, of which €24 billion went to wage support and €3.5 billion to helping the self-employed make ends meet.

In addition, companies owed almost €21 billion in tax via the deferred payment scheme.

The CPB said in 2021 up to 180,000 jobs could have been lost if businesses had not received help to pay wages and costs while they were unable to trade, while the economy would have shrunk by a further 0.6%.