New measures backed by MPs in two days of debate on the caretaker government’s spending plans have added almost €4 billion to the budget, the Financieele Dagblad said on Friday.
MPs voted to freeze petrol taxes at their current level, increase the minimum wage, cut energy taxes and put more money into public transport, on top of the €2 billion package put forward by the cabinet to reduce poverty on Tuesday.
At least half of the cost will be passed on to industry, banks and the wealthy, the paper said.
Employers organisations had already warned about the impact on industry, particularly small firms, which, they say, will be hard put to meet higher minimum wage requirements.
As yet it is unclear if the changes agreed by MPs will eventually materialise, the FD said, because they have not yet been underpinned financially. Nor is support in the upper house, or senate, guaranteed.
In addition, there is not enough time to debate all the ministries’ budgets before the general election on November 22 and the new-look parliament may also view things differently.
Nevertheless, a narrow majority of MPs backed GroenLinks/PvdA and ChristenUnie called for a further 1.7% rise in the minimum wage and social security benefits next year, as well as putting €425 million more into organised childcare.
The total cost of some €2 billion is to be funded by increasing the top rates of corporate and asset tax by two percentage points, generating €450 million, increasing the tax on bank profits to raise an extra €350 million, and introducing a tax on share buybacks to bring in €1.2 billion
“MPs are playing with fire,” warned the Dutch banking association, while investors lobby group VEB described the plan for a tax on share buybacks, as “absurd”.
Prime minister Mark Rutte has already warned that a tax on buybacks “probably won’t be possible” before January and could lead to more companies leaving the Netherlands.
Neither Pieter Omzigt, whose new party NSC is leading in the polls, and pro-farmers BBB, supported the proposal, with Omtzigt slamming the financial underpinnings.
Both parties did, however, back a VVD measure to freeze the tax on fuel, which would ensure petrol will not go up by 20 cents to €2.50 for a litre of Euro95 from January, as well as a permanent cut in energy tax. That was not supported by GroenLinks/PvdA, which is the second biggest party in the senate.
The €1.4 billion needed to fund these measures would come from “reserves which had been allocated but not spent”, income from natural gas and, if necessary, a raid on the government’s economic growth fund, VVD parliamentary party leader Sophie Hermans said.
MPs also want to freeze public transport tickets, which would involve an additional €120 million for state-owned NS and €300 million for the regional bus companies, which are owned by the private sector.
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