The Netherlands on Tuesday boosted its defence spending by 220 million euros ($248.8 million) for 2016 aiming to strengthen its military capacity and step up participation in overseas missions.
Amid the growing migrant crisis, the Dutch government also called for an "integrated" European approach as it set aside an added 539 million euros to fund the arrival of new refugees into the country.
A further 110 million euros will be dedicated to financing registration centres in the refugee camps which have sprung up in countries neighbouring war-torn Syria.
"The refugee stream is growing and will not tolerate a wait-and-see approach," Dutch King Willem-Alexander said at the opening of the country's parliament.
In a speech written by Prime Minister Mark Rutte, the king laid out the Liberal-led government's plans for the coming year, calling for an "integrated approach" across Europe to the migrants flooding in from overseas.
"This means sharp choices to stem the influx and a better system of distributing them across EU members states," he said.
In 2016 the Dutch government will increase its annual defence spending by 220 million euros to a total of 7.5 billion euros, with spending rising a further 345 million by 2020.
The money will be spent on improving Dutch military deployment capacity and increased Dutch involvement in international military missions.
Also weighing heavily on Dutch politics is the refugee crisis.
More than 430,000 people have crossed the Mediterranean to Europe so far this year, with 2,748 dying on the perilous journey in the continent's biggest migrant crisis since World War II.
"It's about international conflict management... fighting human trafficking, a strict but fair asylum procedure, an effective return policy as well as integrating those who cannot go back," the king said.
EU ministers on Monday failed to reach agreement on a quota plan to share the burden of a flood of refugees coming largely out of war-torn Syria and Iraq.
Dutch Finance Minister Jeroen Dijsselbloem, who is also Eurogroup chairman, officially unveiled the 2015-16 budget including announcing five billion euros in tax breaks for citizens and companies to help create more jobs.
Dutch government policy think tank, the Central Planning Bureau (CPB), has predicted 2.0 percent growth for this year and 2.4 percent growth in 2016 for the EU's fifth-largest economy.
The budget deficit is predicted to be 1.5 percent of gross domestic product (GDP), well below the EU's 3.0 percent ceiling, Dijsselbloem said.
"It's going better than expected," he told lawmakers.
But Dijsselbloem, referring to the 6.7 percent unemployment rate, added: "It's not going well enough."