People with higher than average incomes will be hardest hit by the new coalition’s plans because they will have to pay more for healthcare, their children and their homes, analysts say on Tuesday.

The right-wing VVD and Labour party (PvdA) outlined their plans for government on Monday afternoon and both leaders were careful to spell out that ‘everyone will have to make sacrifices’.
The new cabinet is planning to raise nearly €23bn through cuts and extra taxes. Of this, extra spending will account for €7bn, leaving the net reduction in government spending at €16bn. Most of that will be earned by cuts in spending on the health service and social security.
Unemployment
According to the government’s macro-economic forecasting agency CPB, the new cabinet’s proposals mean unemployment will rise to 5.75% by 2017 while economic growth will average 1.25% a year.
At the same time, unemployment benefit (ww) will be cut to one year at 70% of last-earned income and one year at the level of the minimum wage. After that, household income and assets will be taken into account.
Spending power for those on average or low incomes will rise fractionally but those earning more than €100,000 will see their spending power go down by 0.6%. People earning more than €100,000 will also no longer be able to deduct pension premiums from tax.
Health
In particular, changes to the way the health service is funded will hit high earners. According to the Financieele Dagblad, the plans to make health insurance premiums reflect incomes will adversely hit those earning more than €66,000 a year.
The new cabinet is also cutting home help services for the better-off elderly and will reduce the amount of care covered in the basic package. People who visit hospital accident and emergency departments without a doctor’s referral will also face a €50 charge.
Immigration
The new government is also continuing the previous administration’s tough line on immigration and integration.
Although measures to eradicate dual nationality are no longer on the agenda, the new cabinet does plan to extend the residency period before immigrants can take Dutch nationality from five to seven years.
The residency requirement for voting in local elections is also to be extended to seven years. Speaking Dutch is to become a condition for receiving basic welfare (bijstand) payments and immigrants will not be allowed to claim welfare for seven years after they arrive.
The new cabinet also wants these changes to cover EU nationals.
Financial sector
Several measures in the cabinet’s plans will directly affect the Dutch financial services sector. Bankers will have to swear an oath of integrity and screening of bankers will be extended to all workers involved in major transactions.
At the same time, performance-related bonuses will be capped at 20% of fixed salary.
The agreement also states ABN Amro will not be privatised ‘until the financial markets are stable’.
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