Budget deal in sight after coalition agree to scrap welfare cuts

Coalition parties D66, CDA and VVD hope to have a deal with the opposition parties finalised by Tuesday evening after talks over the weekend brought progress on the key issues of welfare and wealth taxes.

The left-wing parties Pro and Volt said the cabinet had agreed to drop its planned €6bn cuts to social security in full, a key demand of the two parties and trade unions.

The two-year maximum term for the WW unemployment payments will be retained, while the long-term incapacity benefit WIA will remain untouched.

The government had already abandoned plans to cap benefits such as sick pay and maternity pay at a lower level and raise the retirement age in step with life expectancy.

Volt leader Laurens Dassen said the talks would need to continue to identify where the cabinet plans to find the money that will not be raised from welfare cuts, adding that “the devil is in the detail”.

Capital gains tax

The main concession to parties on the right is the introduction of a capital gains tax to replace the “box 3” asset taxes, which need to be reformed after the Supreme Court ruled that they breached European human rights laws.

The new system is expected to leave a €10bn hole in the public finances in the short term because assets will only be taxed when they are sold, rather than on their annual gains, as is currently the case.

The Telegraaf, which has seen leaked copies of the plans, said the cabinet planned to raise the “box 2” tax on income from shares and dividends from business owners, to offset the loss.

The right-wing parties JA21 and SGP, who have also teamed up for the negotiations, were less enthusiastic about the proposed deal after meeting prime minister Rob Jetten and finance minister Eelco Heinen on Sunday.

“Nothing about migration”

JA21 leader Joost Eerdmans said the plans were “more left than right”, adding he had heard “nothing about tax cuts, migration or security”.

Chris Stoffer, of the orthodox protestant SGP, said his party’s concerns about abortion and surrogate parenting had also not been addressed.

Jetten and Heinen also held talks with ChristenUnie leader Mirjam Bikker, whose party could act as a go-between for the two sides. Bikker said she had seen “urgency, unity and movement” in the government parties after meeting the ministers on Saturday.

The cabinet needs 10 opposition votes to pass the budget in the lower house and 16 seats in the Senate.

Pro and Volt have 21 seats between them in the Tweede Kamer and just enough senators to secure a majority, while the right-wing duo can only provide enough votes in the lower house.