In the coming days, the coalition parties will look for cover for 10 to 15 billion euros in setbacks. The four government parties are preparing the Spring Memorandum and will consider this week where they will get the money. But any solution is politically controversial.
It concerns billions of euros for purchasing power, savings tax and AOW. New is a setback of 1 billion euros per year due to a new corporate tax for multinationals canceled, according to sources in The Hague. That’s because Poland voted against an EU deal on corporate tax last week.
Tax for major shareholders
The cabinet had already counted on that money in its financial pictures, but that will no longer be forthcoming. To compensate for this, an increase in the tax in ‘Box 2’ is being considered. It concerns the tax for major shareholders that many entrepreneurs pay, from notaries to people with a butcher’s shop.
That is exactly the place where many political leaders also look for money for the largest cost item: the savings tax (‘Box 3’). That is the tax on savings. After a court ruling, the cabinet must compensate savers. Sources in The Hague assume a one-off bill of 7 billion euros.
Money from National Growth Fund
Then a few extra billions have to go to the Ministry of Defense. The idea is that this should be paid from the money that was intended for the National Growth Fund, also known as Wopke / Wiebesfonds called. The cabinet had planned to deposit 6.7 billion euros there, but that seems to have been abandoned.
Then the state pension. The Upper House believes that the old-age pension, contrary to the plans of the cabinet, should be completely increase with the minimum wage† The costs are estimated at 2.4 billion euros per year. Cover must also be found for that. There are also wishes, for example, to allocate more money to youth care and nursing homes.
Purchasing power
And then, of course, there is the purchasing power. In this time of war and unprecedented inflation the cabinet wants to accommodate the middle and especially the lower incomes. An additional 3 billion euros has been made available for this in recent months. The wish is to do more for this in the near future, but that will have to be paid by the more wealthy in the Netherlands.
“If you want to do something for vulnerable groups, then it is a redistribution of money within the Netherlands,” says Minister Van Gennip of Social Affairs. “So other people will have to pay that.”
Wealthy Dutch people
The cabinet is therefore also looking at the more wealthy Dutch: should they pay more tax? D66 and ChristenUnie already wanted this at the negotiating table in the cabinet formation, but it was stopped by the VVD. Now that the bills have piled up in a few months, that discussion will be resumed.
The alternative is to cut spending or allow the national debt to rise further. But most parties are not waiting for that either.
This week the coalition parties will talk about coverage. The Spring Memorandum must be submitted to the House of Representatives by 1 June at the latest.
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