Almost seven months after the March 15th election, a new coalition has been formed to govern the Netherlands. Mark Rutte, leader of the VVD (People’s Party for Freedom and Democracy) carries on as Prime Minister. In government, the VVD are joined by the CDA (Christian Democrats), D66 (Liberals) and CU (Christian Union). Cabinet posts are yet to be allocated.
The main plank of the coalition agreement is a radical overhaul of the taxation system. Income taxes will be simplified by combining tax and national insurance with only two rates, 37% and 50%. The new government estimates that middle income earners on €40,000 a year will be €1,200 better off. However, they are giving with one hand and taking with the other, since the lower rate of BTW (sales tax) will rise from 6% to 9%. This tax is added to day-to-day essentials like food and train tickets, so the cost of living will rise, which will hit lower earners. That said, higher earners will lose out when tax breaks on mortgage interest are reduced. An increase in affordable rental housing has been promised to help those struggling with the overheating housing market, though the details are vague.
Ambitious reductions in carbon emissions have been promised. Houses will no longer be built with gas connections. By 2030, all coal-fired power stations will be closed and all new cars must be emissions-free. Gas extraction in the Groningen area will be wound down further, and more space will be allocated for wind generation.
There will also be investment in education, some of which has a socially conservative twist. It will be compulsory for pupils to learn the national anthem at school. Trips to the Rijksmueum and Parliament will be organised for all and everyone will receive ‘The Canon of Dutch History’ on their eighteenth birthday. The socially liberal D66 have, however, managed to negotiate a concession to their plans for expanding euthanasia, with a feasibility study planned into their voltooid leven (end of life) policy, under which over-75s could choose to end their life without the need to prove ill health.
Overall, the coalition agreement is a mash-up of conservative and radical policies befitting the unlikely alliance of parties forming the coalition. Since the new Dutch government has a majority of only one, it will be interesting to see if this eclectic fifty-five page document forms a stable basis for government.