The new cabinet must borrow tens of billions of euros to solve major problems, say VVD, D66 and CDA. Examples include the climate crisis, the nitrogen crisis and the overdue maintenance of infrastructure.
It is not yet clear exactly how much money is involved, and it has not yet been determined which problems are chosen for it, but it is certain that it concerns large one-off expenses. Borrowing money is attractive due to the extremely low interest rates. The Netherlands can borrow almost for free on the capital market.
The ‘mindset’ to borrow billions is apparent from formation pieces in the hands of the NOS. The borrowed money should be used to mobilize funds beyond the ordinary budget rules to tackle various problems. It concerns one-off money, which therefore does not form part of the budget year-in, year-out.
VVD, D66 and CDA have discussed these financial principles with each other. Negotiations will continue over the coming weeks.
Money locks open
The result is that the money locks can open for important themes, because it is therefore outside the normal budget. “So that the EMU balance is not directly taxed”, the parties write, referring to the European rules on expenditure that mean that extra expenditure must be compensated elsewhere.
Spending borrowed money through a fund has been done before, in particular through the Wopke-Wiebes fund for the renewal of the economy. A total of 20 billion euros will be made available for that fund over the next five years. The forming parties therefore want to set up a fund for more political challenges and to be able to pull out their wallets for this.
“After establishing funds for incidentals, we want to return to normal fiscal rules,” the parties wrote. Because the forming parties want to create financial scope with the funds for certain themes, they believe that they should be stricter and therefore more economical on other themes. After large expenditures, the parties thus commit to more frugality.
For the rest of the political agreements, they want the normal budget rules to apply in a new cabinet. And as it stands, the parties write in the document, this means that if the new government wants to invest in something, it must cut back just as much on something else.
Children’s ceiling
What is also new is that the three parties believe that the future cabinet should agree in advance how high the maximum taxes and premiums for citizens and businesses may be. The tax burden may not increase further during the term of office than was agreed at the beginning, regardless of what happens. This could mean, for example, that an increase in health care salaries cannot be paid through a higher corporate income tax.
The parties want fixed ‘burden frameworks’. “A predictable tax burden for companies and citizens by introducing a tax ceiling. Interim policy changes remain within these frameworks.”
In general, the parties write, the starting point of a new coalition agreement should be: “tax increases for citizens must be limited and, where possible, turned into tax relief.”
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