A higher minimum wage faster, more money for old age pensioners, billions more for defense, but slightly less money for climate and nitrogen measures. The complex financial puzzle that the cabinet had to solve is nearing completion.
With various holes in its wallet, the Rutte IV cabinet has to considerably reform this year’s budget via the so-called Spring Memorandum. But the knots have been unraveled, insiders say. The Council of Ministers is expected to hammer out the plan on Friday.
As a result, the cabinet is raising the minimum wage a year earlier than planned. Due to high inflation, the lowest incomes are currently falling sharply.
It had already been agreed in the coalition agreement that the minimum wage would increase by 7.5 percent, step-by-step, in 2024 and 2025. But increments of 2.5 percent per year will start next year.
It has also been agreed between VVD, CDA, D66 and ChristenUnie that the so-called link with the AOW in any case maintained at the first increase in the minimum wage. That is good news for the elderly, because in the coalition agreement the link with the state pension had just been dropped, which led to protests from opposition parties.
In addition, defence billions of euros more in the coming years, also a wish of the House of Representatives. The plan is now to spend 2.4 billion euros extra on the armed forces, bringing the Netherlands closer to the NATO standard.
Expensive
One last and very expensive decision has to be made: that about the failed savings tax. Now that the judge has put a stop to how the government has taxed assets with the savings taxvictims must be compensated. Exactly who and how much that will cost is still under discussion, but it is expected to cost almost 12 billion.
It seems that companies are becoming the child of the bill to pay for all wishes and obligations. Entrepreneurs are quicker to pay the high rate for the profit tax Pay. Now a rate of 25.8 percent applies from a profit of 395,000 euros, which will come into effect from a profit of 200,000 euros. There are also plans to tax directors and major shareholders more heavily.
In addition, the expat arrangement further sober. This arrangement, to bring bright minds to our country, gave expats a tax advantage because they did not have to pay tax on a maximum of 30 percent of their income. This will soon only apply to expats who earn less than the Balkenende norm, so up to a maximum of 216,000 euros.
What will hurt D66 in particular is that there will also be some cuts in the climate and nitrogen billions that the cabinet has reserved. Some of that is being ‘planned down’, just like that of the investment fund that has come to be called the Wopke-Wiebes Fund. A total of 2.2 billion would be taken from those three pots.
support
The coalition parties must still receive support from the opposition for all plans, because the VVD, D66, CDA and ChristenUnie do not have a majority in the Senate. The hope of the ruling parties is that raising the minimum wage will help. PvdA and GroenLinks in particular insisted on this, although the wishes of those parties reached further.
The Spring Memorandum must in any case reach the House of Representatives before June 1, as the law dictates. Then the necessary adjustments for this year’s budget can be made.
After that it is ‘head counting’, in other words: how many opposition members support the plan to obtain a majority, especially in the Senate? Six seats are needed in the Senate. Prime Minister Mark Rutte and Minister Sigrid Kaag held a round of talks over the past two weeks to ‘collect wishes’. It remains to be seen whether these have been processed sufficiently so that there is a approval from, for example, the left (PvdA and GroenLinks) or the right (JA21).
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