The new Dutch governmental plans: Confidence in the Future
The new Dutch governmental plans: Confidence in the Future
On Tuesday, October 10, the new Dutch government, Rutte III, presented its plans for the future in a 70-page document titled “Confidence in the Future”. This document comes to us after 209 days of negotiation by the coalition parties VVD, CDA, D66 and ChristenUnie. You can expect changes in all areas of society, but here are the important points.
Security and Justice
The Dutch police will receive 267 million euros for extra neighbourhood police agents and investigators, amongst other things. The investment in the police will allow them to be more effective and increase digital safety. Diversity within the police force should also improve. The incentive for police agents to hand out fines has also been taken away, as the budget has been created without including any money this may yield.
Another 95 million euros will be reserved for cybersecurity, which will be used to increase the capacity and ICT facilities provided to staff in the departments of Security and Justice, Defence, Interior and Kingdom Relations, Infrastructure and Environment and Economic Affairs.
Fighting terrorism is also a part of the governmental plan, and thus an extra 13 million euros has been made available for counterterrorism each year. Hate speech crime sentences have been increased from one to two years under the new government and it will become punishable to spread revenge porn as well.
Labour Market and Social Security
In the Dutch labour market, changes are being made to regulations regarding sick pay. Smaller businesses with 25 employees or fewer will only have to pay the salaries of their sick employees for one year instead of the current two years. For larger businesses, the standard term of two years of sick-pay remains the same.
In the new plans, it will be easier for employers to dismiss employees, but the severance pay employees are entitled to will also increase to accommodate this. Currently, employers may continue to hire the same employee on a temporary contract for two years before it is considered to be permanent; this period of time will increase to three years.
Freelancers will be better protected under the new plans, as a minimum hourly wage will be set at 15 to 18 euros. Entrepreneurs who earn less than 125 percent of the legal minimum wage and have worked for more than three years for a client will have the right to a permanent contract.
There will be a new pension system in 2020, where people will save individually for their pensions, instead of the current system where everyone also receives a pension from generic savings.
Paternity leave will increase from two to five days in 2019, and new fathers will be able to take another five weeks paid leave at 70 percent of their salary in 2020. Child benefits will also increase by a total of one billion euros.
Dividend tax will be abolished and corporate income tax will decrease from 25 to 21 percent; however, taxes will increase on energy use and CO2 emissions for businesses. Under Rutte III, the gap between the rich and the poor is set to decrease by 0.1 percent.
In the primary education sector, 270 million euros has been set aside for teacher’s salaries and another 450 million has been reserved to reduce the workload of teachers.
There will be more focus on citizenship in primary schools and children will have to learn the Dutch national anthem (Wilhelmus). Pre-primary education will also receive a sum of 170 million euros and another 15 million will be allocated to help children who either have a learning deficit or are gifted.
Students studying at a Dutch university will only have to pay 50 percent of their tuition fee in the first year and those following a programme to become a teacher will receive this discount for the first two years of their studies. The loans-system for higher education is, however, here to stay.
Children must stay in secondary school education until they have a qualification that will help them to find a job. Previously, children had to stay in education until they turned 18; this will now be raised to 21. Young people will be able to do a non-compulsory societal internship. If completed, the candidate will have priority when applying for jobs in the Dutch government.
In healthcare, as previously announced, the “own risk” excess will remain at 385 euros, as it was in 2017. However, in order to keep own risk at the same level it was last year, the monthly premiums healthcare providers in the Netherlands offer will increase.
The government will invest 2,1 billion euros into nursing homes so that these comply with the new standards set for good care.
This cabinet period there will also be 170 million euros available for prevention and health promotion. After this period, 20 million euros per year will be available. A national plan of action, which focuses on smoking and obesity, is being developed.
The immigration policy is changing and those with residency permits will not be able to claim welfare benefits, such as healthcare allowance or rent allowance, for the first two years of their stay. However, municipalities will help migrants and will arrange housing, health insurance and will also help them through the integration process. Tougher standards will be imposed on integration agencies not operated by the government.
Currently, refugees receive a five-year residency permit. Under the new governmental plan, refugees will now only receive a three-year residency permit. For both immigrants and emigrants, there will be more options to have dual nationality.
In the housing sector, rent allowance will be phased out in exchange for affordable rental houses in the free sector, and over the next 20 years, the tax deduction on mortgage debt will be gradually decreased to nothing. Additionally, taxes on household energy are increasing for gas use, but decreasing for electricity.
To tackle climate change and reduce CO2 emissions in the Netherlands, all new housing will not be connected to the gas network. The government has set a goal to reduce CO2 emissions by 49 percent by 2030. Before this date all coal-fired power plants must be shut down. In accordance with the move towards green energy, all cars in the Netherlands must be emission-free by 2030.
Climate and energy agreements will be incorporated into national law and new plots will be designated for wind turbines in the North Sea. In addition to this, the government will reserve four billion euros for the transition to cleaner energy.
Income and taxes
As expected, the Dutch government is planning to reform the tax system and move towards a two-band system, instead of the current four-band one. Asset tax will be reduced, as the tax-free threshold will be raised from 25.000 euros to 30.000 euros.
The lower VAT rate, which applies to groceries, books and entertainment, will increase by 3 percent to 9 percent. This means that households can expect an increase on their grocery bills. Taxes will be increased on tobacco products as well.
Specific to expats, the 30% ruling will be shortened from eight years to just five.
In the detailed document addressing the governmental plans, a few other important points were made:
The Dutch government will be limiting gender registration where possible and will also add the prohibition of discrimination on the basis of sexual orientation to the Dutch Constitution. Two billion euros will be invested in infrastructure to improve the roads, bike paths, public transport and waterways.
As well as these measure,there are plans to cultivate cannabis so that the government can regulate it. This would make it safer for users in the Netherlands, and reduce the organised crime surrounding it.