Dutch cabinet agreement 'finalised'

The VVD-PvdA alliance has agreed to phase out tax relief on mortgages by an annual 0.5% from 2014 as the final touchs are put to the new coalition agreement, the Telegraaf reports on Friday.

The maximum tax deduction will go down from the current maximum 52% to 38% over an 18-year period, the paper says.

In return, the new coalition will reduce the top rate of income tax from 52% to 49% and extend the 42% tax band, the paper says.

Leaks

The right-wing VVD and Labour party have been in talks on forming a new government since the September 12 general election and are now nearing an end, political pundits agree.

Other measures in the coalition accord have also been leaked. On Thursday night, various media reported the two parties have agreed to a ‘limited’ amnesty for refugee children who have become rooted in the Netherlands.

Plans to make it easier for companies to sack staff will also be scrapped and the cost of health insurance will become partially income-dependent.

According to the Financieele Dagblad, industry faces a €1bn increase in costs, some of which may be due to extra healthcare costs, but does not give further details.

Structural spending

Insiders say the new coalition has agreed to structurally cut spending by €15bn in an effort to get the budget deficit below eurozone limits. The actual volume of cuts will be higher to pay for extra spending.

The broad agreement has now been sent to the government’s macro-economic forecasting agency CPB which will assess its impact on the state finances.

Once that has happened and policies have been fine-tuned, the coalition agreement can be presented to VVD and PvdA party members. The PvdA will hold a congress to vote on the deal – probably next weekend.

Queen

RTL’s parliamentary correspondent Frits Wester says there is now ‘virtually’ nothing that can stop the new alliance becoming a reality. He suggests November 6 as a possible date for the new cabinet to be presented to queen Beatrix.

The papers are now full of speculation about possible ministers. The Telegraaf says the cabinet will have 13, including a new post of ‘programme minister’ who will be in charge of reforming the housing market and the civil service.

The paper says most VVD ministers will return to the same jobs. Labour MP Jeroen Dijsselbloem is likely to get the finance ministry and Amsterdam city council executive Lodewijk Asscher is being tipped for education.

Source: DutchNews October 26, 2012