Some people are already calling the finance minister’s first budget ‘the revenge of Wouter Bos’. Bos is in a difficult position. His Labour party (PvdA) is losing popularity in the polls. Bos himself has been criticised for not being tough enough on top people’s pay and for supporting redundancy law reforms.
But with his first budget, Bos has been able to score a number of significant PvdA points.
Firstly, he has based his spending plans on what he says is a ‘realistic’ estimation of economic growth, rather than the cautious approach of his free-market Liberal (VVD) predecessor Gerrit Zalm.
Then he has found ways to compensate for the refusal of the Christian Democratics (the senior government coalition party) to allow any changes to mortgage tax relief. He has, for example, increased the home-owners tax for properties worth more than €1m.
He is also cutting the basic rate of income tax to ensure that those on minimum incomes and poor pensioners will not have less to spend next year.
But at the same time, the total tax burden is set to increase by €7bn and everyone else will have less disposable cash. Bos can claim that the PvdA is looking after the poor (at the expense of the rich).
However it will be hard to convince voters that – at a time when the economy is running full speed ahead – they should not be reaping the benefits too.
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