The cabinet is considering giving everyone who receives health care benefits, at least 4.5 million Dutch people, a one-off 500 euros to maintain purchasing power. Prime Minister Mark Rutte just said that in the House of Representatives.
He wants to investigate ‘whether this is possible’, ‘how this is possible’ and how this should be paid for. “We’re going to take a serious look at this.”
Rutte responded to a proposal from PvdA and GroenLinks with an ‘autumn allowance’ of 500 euros for those people who receive health care allowance. This is to support the purchasing power of lower and middle incomes, something Rutte said he felt for. “We’ll see if this is something we can do this year.”
In addition, the cabinet is looking at the introduction of a so-called ‘windfall tax’ at large companies that benefit from the high energy prices and companies that made top profits in corona time.
A plan for this from ChristenUnie and Volt was received positively in the House of Representatives today by government parties D66 and VVD, while PvdA and GroenLinks had previously suggested something similar.
The plan was conceived against the background of purchasing power problems. Higher energy prices, the price at the pump, inflation: it all counts for a growing number of Dutch people. At the same time, the government’s piggy bank is not lavishly filled, partly because a lot of money has been set aside for climate, nitrogen and defence. In addition, the cabinet has already earmarked 6.4 billion euros to soften the blow to purchasing power.
With that in mind, ChristenUnie and Volt are launching the idea of a ‘windfall tax’, a tax for companies that should generate more money for the government. This means that ‘sectors’ that have made extra high profits during corona time have to pay extra tax. For example, supermarkets and energy giants are said to have made ‘excessive profits’.
This is already happening in the United Kingdom, for example, through a one-off additional tax of 25 percent on the profits of large energy companies.
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D66 said it was open to that suggestion and the VVD is also showing willingness. Party leader Sophie Hermans also called on the cabinet to ‘do everything possible to see: what can we do now?’ Hermans did wonder whether the Netherlands was not making itself too unattractive for large companies, or whether such a tax would not affect ‘our business climate’.
The question is whether the idea offers solace in the short term. Such an extra tax is technically and legally difficult to implement, the cabinet said earlier. According to PvdA and GroenLinks, it is therefore ‘fastest’ to increase corporate tax. “We tax the 5 percent of the most profitable companies with this,” says Jesse Klaver (GroenLinks).
Incidentally, the idea is not entirely new and by no means a guarantee that the policy will be or will be successful. In the run-up to the elections, CDA leader Wopke Hoekstra came up with a similar idea to help smaller entrepreneurs. Distressed SMEs and family businesses could thus get some financial air through a temporary tax levy on companies that actually thrived during the corona crisis, such as supermarkets and online stores.
But no matter how much Hoekstra liked the idea as a party leader on the way to the elections, once he was in the cabinet, he was more frugal again. “I can say that we as a cabinet are looking into it,” he said at the time. After that, nothing was ever heard of again.
The fact that the cabinet is now sympathetic to the proposals for an extra 500 and a new tax is also due to the political situation. The cabinet does not have a majority in the Senate and the support of, for example, GroenLinks and PvdA is welcome.
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