In the spring memo, with the plans and money for this year, the Rutte IV cabinet is trying to become friends with left and right. Although it does not seem to have worked completely yet.
Significantly more money goes to the defense. The minimum wage will increase next year, and not only in 2024 as previously agreed, and the national pension will increase as well. At the same time, a little less money is spent on the billion-dollar funds for the climate, nitrogen supply and economic innovation. Businesses and people with wealth will pay more taxes.
It is the result of long negotiations in the coalition of VVD, D66, CDA and ChristenUnie, and perhaps also of the round that Prime Minister Mark Rutte (VVD) and Finance Minister Sigrid Kaag (D66) recently conducted through opposition parties in the hall. of representatives.– to hear wishes and to seek support for the plans in the Senate, where Route IV does not have a majority.
The Cabinet writes in a letter to the House of Representatives that “a unique combination of extremes” is now emerging. The Dutch economy is recovering fairly well after the corona crisis, and unemployment is low. But the war in Ukraine is costing money, prices of food, materials and energy are rising, and consumer confidence is at an all-time low.
This spring memorandum is also unique because, for the first time, it provides an ‘overview’ of the budget for the coming years. In this way, the Folketing will already know in the spring and not only on Budget Day what the government’s financial plans are in the longer term. This gives more time to debate it, although Parliament can only vote on changes for the coming years in September.
Read the article Rutte and Kaag are looking for the back rooms
It is not so unique that these plans were already partially leaked in advance; a firm tradition around Prince’s Day.
The extra money for defense will increase to 2.2 billion euros a year from 2025. This means that the Netherlands will finally comply with NATO’s agreement on defense spending (2 percent of GDP). The increase in the minimum wage will cost almost 1.5 billion euros next year alone. The AOW increase will cost 1.1 billion euros that year, rising to more than 2.3 billion.
In addition, the cabinet must reimburse tens of thousands of savers who have erroneously paid too much tax in box 3, which costs 3.6 billion euros. Another ‘windfall’ is the Supreme Court’s ruling on Friday that the government should only compensate those savers who have objected in time – and not all savers who have been duped.
To cover all expenditure and setbacks, the government will increase the budget deficit this year to 3.4 percent of GDP – 3 percent is actually the maximum within Economic and Monetary Union.
In addition, over a number of years, for example, 2.2 billion euros will have to be cut in the funds for economic growth, the climate and the supply of nitrogen. Minister Kaag did not want to call it “cutting” on Friday, but “a reprioritisation”. Minister colleague Christianne van der Wal (Nature and Nitrogen, VVD) also said the cabinet will work “even smarter and more efficiently” to reduce nitrogen.
The transfer tax on the purchase of housing or land is further increased from 9 to 10.1 percent; not for homeowners who live in the home themselves, but for investors, for example.
And companies and people with wealth will therefore pay more tax. For example, the increase in the redemption amount in box 3 is reversed, which gives 0.3 billion euros annually. In the run-up to Budget Day, the government wants to look more broadly at the tax on labor on the one hand and wealth on the other in order to reduce inequality in prosperity in the Netherlands.
Little or nothing has been done with our input
Joost Eerdmans, party chairman JA21
The initial reactions from the opposition are critical. The PvdA, which together with GroenLinks can help the coalition in the Senate to a majority, calls the elections Route IV makes “lean”. The PvdA thinks it is “good” that the minimum wage and the national pension are rising, but due to the high inflation it does not benefit people, according to the party.
“What a shame. What a deception,” tweets PVV leader Geert Wilders. .
Opposition parties also look differently at the round that Rutte and Kaag have made. Many parties wanted the AOW to rise in line with the minimum wage, but 50Plus member of the Senate Martin van Rooijen claims smart success: “Glad the cabinet has listened to 50Plus”, he tweeted.
Member of Parliament Joost Eerdmans from JA21, who can also help the coalition gain a majority, is disappointed. “Route is roughly to the left,” he says. JA21 is happy with the money for the national pension and the defense, but is critical of the rising government deficit and believes that the funds for climate and nitrogen are really untouched. “Little or nothing has been done with our input.”
Prime Minister Rutte did not want to say who he expects support from at his weekly press conference on Friday. “Several paths lead to a majority in the Senate.”
A version of this article was also published in the newspaper on May 21, 2022