Unions and cabinet start budget talks on social security reform

Unions and employers say they have had constructive talks with ministers as they try to end the impasse over next year’s budget.

Prime minister Rob Jetten said the “real negotiations still have to start”, but initial discussions had been good-natured and positive.

The government needs to plug a gap of around €6 billion in the public finances after it agreed to abandon plans to reduce the welfare bill by cutting the long-term incapacity benefit WIA and shorten the maximum term for unemployment pay (WW).

The three largest trade unions, FNV, CNV and VCP, last week called off a series of planned strikes that were called to press the government to save the social security “safety net”.

FNV chairman Hans Spekman said the unions were prepared to look at ways to make the benefits system more cost effective and save money, but the cabinet had not set a target figure. “We are not being asked to meet an objective,” he said.

The minority government hopes to secure support from the left-wing opposition parties Pro and Volt in order to get the votes it needs to pass its budget through both houses of parliament.

Capital gains tax

But finance minister Eelco Heinen also wants to make concessions to right-wing parties on issues such as the reform of the “box 3” income tax mechanism, so that it taxes capital gains rather than asset values.

Heinen has already had to revise his original plans after right-wing parties were critical of his proposal to bring around 850,000 small investors and savers below the threshold for wealth taxes in order to make up the budget shortfall.

There was another setback for the cabinet in the senate, where the farmers’ party BBB stepped up its demands for the government to go back to the drawing board on nitrogen pollution.

Agriculture minister Jaimi van Essen unveiled a package of measures before the summer recess to bring down nitrogen compound emissions and protect Natura-2000 conservation areas, including a voluntary buyout scheme.

He warned that there was little room to water down the measures if the government wants to lift the “nitrogen blockade” that has held up construction projects, while the left-wing party Pro has warned it will not accept any weakening of the plans.

BBB block threat

But the BBB says the plans are unacceptable to farms and rural businesses and have warned they will block the budget in the upper house, where they are the second largest party, unless Van Essen withdraws them.

Jetten said during a debate in the Senate that there was little room to renegotiate the package. “It is ultimately up to the BBB in both houses to decide if they want to be work with us on realising the nitrogen measures and whether they want to keep tying it in with the tax plans,” he said.

BBB senator Henk Marquat Scholz told Nieuwsuur his party was “keen to go along with the cabinet, as long as the nitrogen letter is taken off the table.”