Higher
taxes, no free childcare to pay for coalition plans
April 18,
2025
https://www.dutchnews.nl/2025/04/higher-taxes-no-free-childcare-to-pay-for-coalition-plans/
More income
from traffic fines, higher income tax, and a further delay to free childcare
plans are among the measures the government hopes will fund a raft of new
initiatives announced in the spring financial statement.
While the
first results of the negotiations were made public on Wednesday morning, it was
not until Friday afternoon that the four-party coalition released the full
financial implications of the plans.
Earlier, it
emerged that the right-wing coalition plans to cut unemployment benefit from
two years to 18 months, increase employer contributions for disability
benefits, and reduce the planned cut in income tax.
Money is
also being shaved off individual ministry budgets.
The
government aims to generate an extra €2.5 billion a year by raising the tax on
assets. Currently, people pay tax on savings and other assets over €57,684, but
that threshold is being lowered to €51,396. At the same time, the rate of tax
payable will increase by 1.78 percentage points.
The fictive
return on other assets will also rise. From 2026, rental income and benefits
from personal use will be included in the calculation, the finance ministry
said, without giving further details.
The tax on
soft drinks will be expanded to include dairy products, which have so far been
exempt. The health ministry’s drugs budget is also being cut by €70 million a
year.
The
education sector has reacted angrily to news that a special scheme to help
disadvantaged children at secondary school is being scrapped. “I am really
furious,” Thijs Roovers, from the Aob teaching union told the NRC.
As
previously announced, the cabinet plans to freeze social housing rents for two
years, a move that has angered housing corporations, which say it will hamper
efforts to build new homes. Housing benefit will also rise slightly.
However, the
€1.1 billion extra for defence, announced by VVD leader Dilan Yesilgöz, turns
out to be spread over several years: €200 million next year, €300 million in
2027, and rising to €1.2 billion by 2030.
The cut in
energy tax – which will benefit the average household by €20 a year – will only
apply for three years. Meanwhile, spending on asylum will rise by €3.5 billion,
largely to cover increased accommodation costs.
A further €3
billion has also been allocated to local authorities, largely to pay for
improvements to youth care services.
3% budget
deficit
The measures
put the budget deficit just within the EU’s maximum of 3% of GDP next year.
However, this means that if there is a recession or other setback, the
government will be forced to make further spending cuts.
Finance
minister Eelco Heinen said the package of measures is both “solid and
well-balanced” and does not involve deferring payments. “I stand for healthy
and sound public finances,” he said.
“This
approach helped us greatly during previous shocks, such as the coronavirus
pandemic and the energy crisis. Now too, at a time of international
uncertainty, financial buffers are crucial.”
Discussions
on major issues such as nitrogen-based pollution and climate change have been
postponed until the autumn budget talks.
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