Parties agree coalition government after a record 209 days!

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Today the new centre-right coalition presented its programme – and the new cabinet is expected to be installed 26 October

Today the four-party coalition (VVD/Liberal Conservatives, CDA/Christian Democrats, D66/Liberal Democrats and ChristenUnie/Christian Conservatives) has presented its coalition agreement ‘Trust in the future’ (‘Vertrouwen in de toekomst’).

Now the process of appointing ministers will begin and the new centre-right cabinet, the third to be headed by prime minister Mark Rutte – is expected to be installed on 26 October.

The new cabinet will have 16 ministers, 8-9 junior ministers and include new ministries, among which a minister of Climate & Energy, a minister of Agriculture and a minister of Immigration & Integration.

The new coalition will have a majority of just one in the fragmented 13-party, 150-seat Dutch parliament and its ability to survive a four-year term is likely to prove the toughest test yet of Rutte’s consensus-building skills.

Key elements of the agreement include:

  • The 15% dividend tax will be repealed to attract foreign business and decrease administrative red tape for Dutch business.
  • The income tax system will be changed by cutting the number of tax bands from four to two from 2019.
  • The rate at which mortgage holders can deduct interest from tax will be reduced.
  • The amount paid in asset taxes will be cut by increasing the tax-free limit from €25,000 to €30,000. Assets include savings, shares, art and second homes.
  • The lower value-added tax rate of 6% will be increased to 9%. The lower rate applies to food, books and entertainment and will add €20 a month to the average family’s grocery and entertainment bill.
  • The basic rates of corporation tax will be cut from 25% to 21% while a tax rate of 16% will be levied over the first €200,000 in profits.
  • The new cabinet will take measures against ‘activist shareholders’ to protect Dutch corporations from hostile takeovers.
  • So called ‘mailbox companies’ will have to pay more taxes on royalties and interest.
  • The way will be paved for the introduction of elected mayors but this not yet include drawn up plans of how to put this into reality.
  • Refugees with residency permits will no longer be able to claim welfare benefits or extra help in paying rent and health insurance for their first two years in the Netherlands.
  • A Climate Bill with legally binding goals for CO2-reduction and environmental measures will be introduced. The taxes on gas will go up, and taxes on electricity will go down.
  • The minister of Climate and Energy will negotiate a new energy agreement with stakeholders to reduce CO2-emissions. There will come an extra environmental tax on charter flights and large freight traffic will be charged a levy based on driven kilometres.
  • An extra €770m will be spent on primary teachers pay and improving working conditions.
  • It will be made easier for employers to hire new employees, by decreasing the term of continued wage paying in case of illness to a year for small bsiness up to twenty five employees.
  • €1.5 bn in extra spending on defence, €2bn extra for infrastructure, roads, public transport and bike paths.

The full text of the coalition agreement (in Dutch) is available via this link.