Jetten hopes sweeteners will win opposition backing for budget

The cabinet looks set to take its budget for 2027 to the brink after failing to secure support from opposition parties ahead of the crucial votes on the plans next week.

Prime minister Rob Jetten called on opposition parties to “take responsibility” when the budget plans are debated on Wednesday in parliament, where the centre-right coalition is 10 seats short of a majority.

The latest version of the budget includes around €350 million worth of sweeteners to ease the cost of living and address the priorities of parties on the left and right. But both sides say the measures do not go far enough.

The cabinet has abandoned plans for the so-called “tulip tax”, which would have seen VAT on bulbs raised from 9% to 21%, which was a sticking point for the farmers’ party BBB.

Other spending announcements include an extra €10 million to support sustainability measures in agriculture – a demand of the orthodox Protestant party SGP, which has strong support in rural areas, and €15 million for the police and prosecution service.

The latter is a concession to the far-right splinter group of former PVV MPs led by Gidi Markuszower.

No advance deals

Neither the left-wing opposition block of Pro and Volt nor the right-wing alliance of JA21, SGP and BBB were able to negotiate a deal to secure their support for the budget package.

Instead, the cabinet has opted for a riskier pick-and-mix approach of offering concessions to both sides, in the hope that it can attract enough votes from smaller parties to steer the budget through.

The coalition parties are hopeful they can get the support of a third block comprising the ChristenUnie, 50Plus and Markuszower’s group, who between them have 11 seats in the Lower House.

“I am convinced that we can get the House over the line to support these plans,” Jetten told reporters on Monday.

“We have a responsibility here in The Hague to do good things, and that includes a good tax plan with plenty of improvements for citizens and businesses.”

But in the Senate, the coalition will need to find the support of either Pro on the left or the BBB on the right. The former want to raise taxes on the rich while the BBB are pressing the government to tear up its plans to cut nitrogen pollution from livestock farms.

Box 3 reforms

Jetten and finance minister Eelco Heinen also negotiated a compromise on the “box 3” income tax plan, which has been one of the stumbling blocks in the negotiations, during an extra cabinet meeting on Monday evening.

Heinen’s party, the right-wing liberal VVD, wants to replace the taxes on assets in box 3 with a capital gains tax. But the party was not prepared to accept Pro and Volt’s demand to make up the shortfall during the transition period by raising the tax rate for investors.

The Council of State, the government’s constitutional advisory body, weighed in on Monday with a scathing report on the Box 3 reforms, calling the timetable for implementing them “irresponsible”.

Heinen had wanted to switch to a capital gains tax for real estate assets and investments in start-up businesses in 2028 prior to a full changeover in 2030.

The Council of State said the government would have to hire 250 extra staff to administer the new system, at a cost of €31 million, and the tax office would not be able to meet the 2028 deadline.

The cabinet has now delayed the temporary system until 2029, against the Council of State’s recommendation to wait until 2030, which would cost the government more money.