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Reducing the income gap is a 'reasonable desire', says prime minister

Tuesday 06 November 2012

Liberal VVD voters will be able to live with the new government's healthcare plans and the redistribution of wealth so dear to the heart of Labour (PvdA) is a 'very reasonable desire', prime minister Mark Rutte told the Telegraaf on Tuesday.

In an interview with the paper, Rutte said he sees no signs his party members are against the new coalition agreement, despite thousands of angry reactions and polls indicating nearly half of VVD voters are sorry they voted for the party.

'The members said last week in various surveys that the income-dependent premium for healthcare and the levelling of income differences are acceptable.' Rutte said.

He added that accepting redistribution of wealth was necessary to convince Labour to find savings of €16bn to get the Netherlands' finances in order.

Effects

In the meantime, some of the effects of the government's plans are being worked out. For instance, the policy on rented accommodation will lead to more levelling of income, according to the Financieele Dagblad.

The new policy sets a maximum rent for low-cost housing of 4.5% of the official valuation of the property (woz). The FD estimates 10% of all rented accommodation will have to be lowered in price, leading to problems for housing corporations.

This loss of income is on top of an extra tax on housing renters of €485m in 2014, rising to €1.2bn in 2017.

House prices

According to the government's macro-economic forecasting think-tank CPB, house prices will fall at least 2.7% thanks to the new cabinet's plans to further limit the tax break on mortgages.

House prices have already been negatively affected by government policy to the tune of 4%, says the CPB. The new measure to reduce the tax-break by one-half percent per year from 2014 will see the current maximum drop from 52% to 38%.

The total reduction under the two Rutte cabinets will come to a minimum of 6.7%, says the CPB.

© DutchNews.nl



 
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