New government’s plans will reduce spending power: CPB

Most people will have a little less to spend as a result of the new government’s policies but low income households will be hardest hit, according to calculations by the government’s macro-economic forecasting agency CPB.

The new administration, a minority coalition of the VVD, D66 and CDA, will formally take office next week.

Teachers and people in the armed forces in particular will have more to spend in the coming years, the CPB said in its analysis of the plans. The new government will also make some advances in terms with dealing with climate change and nitrogen-based pollution but not enough to meet targets, the CPB said.

The impact of its housing plans on the shortage of housing will also be “slight”.

In particular, the decision to increase the healthcare own risk element to €460 will disproportionately hit low income households, the CPB said. They will also be hit by the decision to merge two child-related benefits. On average, spending power will go down by 0.4%.

The Netherlands is expected to hit the new Nato norm of spending 5% of GDP on defence and defence-related infrastucture, the analysis shows. More money has also been allocated to education.

The agency points out that because the coalition does not have a majority in either house of parliament, its plans may not go ahead in their current form anyway.