The Dutch state broadcaster, NOS, made a pretty good summary of the coalition agreement of the new government. I thought it would be a good idea to translate it, for those who live in the Netherlands, but do not speak Dutch. So here goes!
The coalition agreement, titled ‘Trust in the future’ is done. What do these 55 pages contain?
Money and taxes
The new government will change the tax system and this has consequences for individuals and companies.
Everyone who works will pay less taxes. Instead of four tax brackets, there will be two: a low rate of 37 percent and a high rate of almost 50 percent. Middle incomes will profit especially: someone with a gross yearly salary of €40,000 will profit about €1200 (per year).
Lowering income taxes will be paid for by raising the low VAT tax from 6 to 9 percent. That means things like daily groceries and train tickets will be more expensive.
People who have over €25,000 in capital (for instance in a savings account or as a second home) will pay less tax. Up to €30,000 they will not have to pay any capital gains tax.
Dividend tax for businesses will be abolished. Now, companies pay 15 percent tax on the dividend that they give to their shareholders.
Corporate tax, the tax that businesses pay on their profits, will be lowered from 25 to 21 percent.
Energy companies will pay energy taxes for using coal and gas power through a CO2 tax. This will make electricity from coal and gas more expensive.
New online providers of financial services (fintech-companies) will get a light version of the banking permit. The cabinet points out that they contribute to innovation and competition in the sector.
ABN Amro will fully go public, as soon as possible, but for the Volksbank (SNS), no decision has been made.
In response to the attempts at corporate takeovers of PostNL, Unilever, and AkzoNobel, the cabinet wants a shift from activist shareholders focused on the short term, to long term investors. Publically listed companies will be allowed to have a waiting period of up to 250 days during takeovers, “provided it does not damage capital movement.”
Mortgage interest deduction will be reduced more quickly to 37 percent, as of 2020. That mostly impacts those with high incomes (above €68,000), who are in the highest income tax bracket. This year, they were allowed to deduct 50 percent of their mortgage interest from their income tax, but in a few years that will be 37 percent (equal to the lowest tax bracket).
This increase in tax burden will be compensated by a lower 'own house flate rate' (eigenwoningforfait). That is a percentage of the WOZ-value of your home that is added as income to your taxable income. That will go from 0,75 to 0,6 percent.
People who have paid off their mortgage will start paying taxes again, through this 'own house flat rate'. That is currently not the case. There is a transition period of 30 years, not 20 as planned before.
The 'villa tax' for houses worth more than €1 million will be upheld. Owners pay about €4000 in income tax plus 2,35 percent of the value of the home above that limit.
There will be more affordable rental homes in the free sector. Rent subsidy will possibly be simplified.
Allowances and elderly rebates
There will be €1 billion extra for the child budget (kindgebonden budget), child care, and child benefits.
Older people, who have reached retirement age (AOW), will get a higher tax exemption, i.e. a higher tax benefit through the elderly rebate.
Climate and Energy
There will be a national climate and energy agreement. The new government, with the help from various parties, wants to reduce CO2-emissions in the Netherlands, for instance by making the tax system greener and using new energy sources.
By 2030 all five coal power plants in the Netherlands have to be closed. The parliament (Tweede Kamer) had already asked for closing all of the coal power plants, but VVD and PvdA (the two previous parties in government) did not want to decide on this issue ealier this year.
Newly built homes will no longer be connected to gas. Currently, by law, people have a right to a gas connection, which the cabinet wants to change into a right for your home to be heated.
If non-profit housing corporations (woningcorporaties) make their housing stock more sustainable, they will get a rebate on the rent tax (verhuurdersheffing) which they have to pay. In total, housing corporations spend €1.7 billion on this tax. The new cabinet proposes a rebate of €100 million. Housing corporations are eligible if they do things like add extra insulation or achieve lower energy consumption in other ways.
There will be a tax per kilometer driven for freight traffic (kilometerheffing). Polluting trucks will pay the most per kilometer. The registration and payments system will be the same as in neighboring countries.
Dumping and burning waste will be more expensive.
A tax on polluting and noisy airplanes is being considered.
New cars have to be emission-free in twelve years.
There will be more space for windmill parks at sea.
Less gas will be pumped out of the ground in Groningen. The next four years, there will be 1.5 billion cubic meters less per year, down to 20.1 billion cubic meters. At the same time, the new government wants to stimulate a lower demand for gas.
The number of refugees that are allowed to come live in the Netherlands will be raised. The number is now 500 per year, soon it will be 750.
The cabinet wants to make new arrangements (within a European context) with countries from which many refugees come. The EU already has a 'refugee deal' with Turkey: illegal migrants coming from Turkey to Europe are sent back. The new government wants to make such deals with other countries, provided they keep to international treaties.
The children's pardon will stay as it is. Children who have requested asylum and have subsequently lived here for five years, stand a chance to receive a residence permit (as do their family members).
There will be eight locations where municipalities can send asylum seekers who do not qualify for a residence permit. These 'bed-bath-bread'-locations will be spread around the Netherlands.
Any asylum permit will from now on be granted for three years, rather than five. Then, it can be renewed for two years. Only after a refugee has had these two temporary permits, can they get an indefinite residence permit.
New immigrants are allowed to keep their double nationality. But next generations will at some point have to choose for one nationality.
There will be €450 million to lower the workload of teachers, attract educational assistants, and lower class sizes.
Elementary school teachers will receive a higher salary. The cabinet will structurally spend €270 million on this.
The loan system for students will be upheld. But to prevent students not starting a degree for fear of high costs, (university) tuition will be halved for first year students. Students who are studying to become teachers (academische pabo), will also pay half in their second year.
Children must learn the national anthem (Wilhelmus) in school. The new government also wants them to go to the Rijksmuseum and parliament (Tweede Kamer).
Young people will be able to do a 'social internship' (maatschappelijke stage), called 'social service' (maatschappelijke dienst), of up to half a year. This service time is not mandatory, but those who do such an internship will get preference when applying for jobs with the government. The cabinet wants to make similar arrangements with private businesses.
There will be €100 million for improvements to technical education in vocational high schools (VMBO).
Everyone who turns 18 years old, will get a small book, containing the canon of Dutch history.
It will be more attractive for employers to offer employees permanent contracts, because the new government finds that the flexibility of the labor market has gone too far.
Employers will only have to give employees a permanent contract after three years of working via temporary contracts. This is now two years.
From 2019, partners will have a right to five days of paid leave after the birth of their child. That is now two days. In 2020 this will be extended. Then, a partner may take five weeks of leave, paid at 70 percent of his or her income. That will be possible up to half a year after the birth of the child.
Employers with few employees will not have to continue paying sick employees for two years, but one. For the sick employee nothing will change, because a kind of insurance fund will be made, into which all small employers will pay.
The pension system will be renewed. The current 'section systematics' (doorsneesystematiek) will be abolished. In this system, everyone pays the same percentage of pension premiums, regardless of age. Thus they build up the same pension. While the money that young people are putting in now, can render for longer than older people are putting in. The cabinet therefore wants to work with personalized pension funds. Though we would still share the risks together. The cabinet will have the Social Economic Council (Sociaal-Economische Raad), employers, and employees advise them on the new system.
The national police will get extra funding for neighborhood police officers (wijkagent) and detectives. This is €267 million per year.
There will be extra money for digital safety. The new government is structurally reserving €95 million for cyber security. This includes making 'smart' appliances safer, which are connected to the internet, such as smart electricity meters and wifi-enabled refrigerators. Businesses will also be stimulated to make safer software.
The cabinet wants to have a law through which so-called Jihad-goers who return to the Netherlands may be held longer, so that there is more time to gather evidence.
The punishment for hate speech will go up: this was at first punishable by a prison term of up to one year, that will now be two years.
Revenge porn, the knowingly spreading of nude photos or videos of someone else, will be a punishable offense on its own.
Detainees will no longer qualify for quick early release. Getting parole after two thirds of their sentence will no longer be automatic. Being released from prison will have to be earned and the early release will be limited to two years.
The new coalition does not want the intelligence agencies to be able to fish for information at random, with a 'dragnet' (sleepnet). In the coalition agreement an evaluation of the 'wire tap law' (aftapwet) is announced and if necessary, supplementary safeguards will be implemented.
There will be an experiment with legal marijuana cultivation. The government will appoint one or more organisations that may legally cultivate marijuana. Coffeeshops may sell the product in six to ten municipalities. With this experiment, the government wants to research whether criminality can be reduced through legal marijuana cultivation.
Staying in areas where terrorist groups are in charge will be a punishable offense.
There will be a ban on criminal bike gangs.
The own risk for healthcare will stay at €385. That was already announced the day after Prince's day (Prinsjesdag). The parliament had to set in motion an expedited procedure to prevent the own risk rising to €400, which the previous cabinet (Rutte II) was planning. Now, the own risk will be €385 until 2021.
Smoking will be more expensive, because the excise duties on tabacco will be raised. The cabinet will also tackle problematic alcohol (ab)use.
The cabinet will invest over €2 billion in nursing home care. We already knew this: the Health Care Institute (Zorginstituut) drafted new requirements with which nursing homes will have to comply. That will cost €2 billion. For caregivers (mantelzorg) there will be €180 million the coming cabinet period.
In total €1.6 billion will be cut from health care in 2021. That will happen through agreements with the health care sector and by measurements which will make purchasing medicine and medical equipment cheaper.
Austerity measures of €188 million for long term health care will be reversed.
Mobility and transport
Notorious traffic offenders will get higher fines. This is offset by lower fines for small traffic offenses.
Outside of the Randstad there will be more sprinter trains. This mostly deals with the following stretches:
The cabinet will strengthen its grip on rail manager ProRail and will make an independent governing body that will be subordinate to the ministry. State secretary Dijksma launched this plan last year, but later the subject was declared controversial and left for the next cabinet to handle.
There will structucally be €100 million for better bicycle infrastructure. For instance, bicycle parking facilities near public transport nodes.
There will be a kilometer-based charge for trucks. For more information, see the part about climate and energy.
When building new roads, self-driving cars will be taken into account.
Older people who consider their lives to be 'completed', but who are not suffering unbearably and without hope, will not get help with suicide, for now. First, it will be researched how large this group is precisely. The new cabinet also wants to start a broad discussion about aging with dignity and the application of the current euthanasia law.
The government will invest in stemcell and embryonic research to reduce the risk of serious hereditary diseases. If a women has a serious hereditary disorder, such as a breast cancer gene, she will have more opportunities to choose the gender of her baby.
The new government will spend €1.75 billion extra on development aid.
Soon, on most government forms, you will not have to indicate whether you are a man or a woman. The new cabinet wants the various levels of government to work gender neutral as much as possible.
The cabinet will invest €1.5 billion per year extra in defense.
There will be a fund for military members who have incurred a trauma or handicap during their time of service.
Of course this is just a small selection of everything that’s in the agreement. Something that may specifically interest non-Dutch speakers is the change to the 30%-ruling:
The so-called 30% rule, whereby qualifying people may be given an extra, tax-free compensation by their employer (of 30% of their gross income), will be valid for only five years. It was previously valid for eight years.
And what do people think about the coalition agreement?
Natuur & Milieu gives the agreement a five out of ten (article in Dutch), a failing grade. They say it has nice goals, but few concrete measures. GroenLinks leader Jesse Klaver agrees, saying that while some parts of the agreement are positive, they feel it does not go far enough to combat climate change. GroenLinks and other left-leaning parties are also not happy about the right wing economic course of the new cabinet. Especially the increase of the VAT is seen as problematic, and there is already an initiative to try and do something about it. Meanwhile, the new cabinet claims that every group of people will have more purchasing power.
Either way, there’s a lot to digest and I hope this helps!