IInformer Richard van Zwol has already increased the pressure considerably. The ‘final week’ of the formation starts on Monday. Now decisions have to be made. The Central Planning Bureau has calculated the policy options for a possible outline agreement and the time for exchanges and compromises has come. The House of Representatives must receive a definitive decision by May 15 at the latest: will that right-wing extra-parliamentary cabinet be created or not?
The final stage of formation will also be the most painful. Only the VVD had its own plans calculated before the elections, the rest will now be done reality check. There is a lot at stake, especially for the big election winner PVV. Geert Wilders made expensive promises during the campaign. Now he will have to fight to make that happen.
An overview of the six most important files on the negotiating table.
CARE All eyes at your own risk
The first thing everyone will look at when presenting an outline agreement is the deductible of 385 euros in healthcare. The PVV promised to abolish this personal payment completely, the BBB wants a ‘significant reduction and, if possible, abolition in the coming years’.
The financial consequences were already known at the time of those promises. Abolition of the deductible costs 3.4 billion euros per year and could increase to around 6 billion euros in 2028 due to the attractive effect on healthcare. Partly for this reason, NSC and VVD were much more cautious. For example, the VVD only opted for a freeze on the deductible.
Wilders will not want to break this election promise. His unprecedented rise in the polls started when he harshly attacked GroenLinks-PvdA leader Frans Timmermans in the SBS election debate for not wanting to abolish the deductible quickly enough. If the PVV leader does not live up to his words now, it could haunt him for years to come.
In addition, the abolition of the deductible has not been the only expensive promise. A week before the elections, the PVV, together with the BBB, announced an initiative law to bring back old people’s homes. According to the CPB, this costs 2.6 billion euros per year, but due to ‘revenue effects’ the parties think they can make do with 600 million. Both parties also promised to include the dentist in the basic package, which would require around 1.2 billion per year. NSC did not go further than one annual dental check-up, which also costs several hundred million per year.
PVV and BBB made their promises at a time when the generally authoritative Budget Space Study Group already warned that healthcare costs are in danger of becoming unsustainable. Due to the aging population and the growing supply of medical treatments, the price tag will increase by more than 6 billion per year by 2028. According to the Study Group, cuts should be made and not additional spending.
SECURITY OF EXISTENCE State pension age and VAT on groceries
Much more money will have to be found if Wilders wants to fulfill his promises for social security, which is the government’s most important cost item next to health care. The PVV is popular among older voters, also because part of the 50Plus election program has been copied. One of the spearheads in the PVV election manifesto: ‘The state pension age will return to 65.’ Thanks to 50Plus, the costs of that plan are also known: 12 billion euros per year, the CPB calculated in 2017.
That astronomical amount did not prevent the PVV from presenting even more expensive plans to improve social security. For example, the party – again shortly before the elections – submitted a bill to reduce VAT on all groceries to 0. Costs: 5.6 billion euros per year. BBB only promised to abolish VAT on fruit and vegetables.
The PVV also wants to further increase the minimum wage, increase housing allowance and reduce fuel excise duties and energy taxes. That also runs into the billions.
Certainly VVD and NSC were more reserved during the campaign. Pieter Omtzigt ‘only’ committed to a social tax rate for the use of a maximum of 1,000 cubic meters of gas. The VVD announced that cuts of 800 million euros are necessary in social security.
The latter is also more in line with the warnings from De Nederlandsche Bank and the CPB. Without cuts, social security costs will increase by 11.4 billion between 2023 and 2028, even without new measures.
SAFETY Additional investments seem inevitable
The arrival of a right-wing cabinet, even if it is an extra-parliamentary variant, must almost be accompanied by additional investments in security. All four parties have promised this in their programs. Wilders promised ten thousand extra police officers, Van der Plas advocated ‘a strong, well-equipped and accessible police force that is visible in all neighborhoods and villages’, Omtzigt wanted to invest ‘in prevention and in expanding the capacity of the judicial chain’ and the VVD arrived at an additional investment of 1 billion euros in police, justice and security services.
In addition, VVD, NSC and BBB want to invest heavily in Defense. For the VVD, this amounts to an additional 2.1 billion per year. The PVV is less outspoken about this, but has said that continued support for Ukraine can be discussed. Approximately 2.8 billion euros in support has already been spent on Ukraine and the majority in Parliament wants to continue to do so in the coming years.
The inevitability of additional investments in security is putting right-wing parties on the spot in other areas. The money has to come from somewhere.
NUCLEAR POWER PLANT All four parties are in favor
Now that there can be government without left-wing or progressive parties, some right-wing trophies will be claimed anyway. They don’t all have to be expensive. It has already been leaked that there is talk of increasing the speed limit. In the campaign, BBB already promised an increase to 130 kilometers per hour, while the PVV exceeded it by 140 kilometers per hour.
Another right-wing showpiece costs a lot of money: the construction of nuclear power stations. All four parties are in favor of this and the current cabinet has already reserved around 5 billion for it. That is probably too little, as is also evident from the list of setbacks that emerged during this formation. Another 3.5 to 9.5 billion euros extra is taken into account.
With four pro-nuclear energy parties as pillars of an extra-parliamentary cabinet, this investment also seems almost inevitable.
ASYLUM Main PVV theme, yield uncertain
The negotiating parties share the hope that the new cabinet will succeed in limiting the influx of asylum seekers. Wilders has often claimed that this will allow him to partly pay for his expensive health and social security plans. In his election manifestos he talks about revenues of ‘billions’.
Yet the calculation of the VVD election program shows that the returns are initially limited. All the asylum-restricting measures that Yesilgöz has in mind will generate approximately 900 million euros per year. The CPB also explicitly points out the ‘legal risks’ of some plans. Not everything is probably possible.
During the election campaign, a stricter asylum policy was central and in recent weeks Wilders has emphasized again and again that this theme is the most important thing for him in the formation. In doing so, he also seems to make it clear to his voters that other promises may be sacrificed.
FISCAL POLICY Call for major cuts
VVD, NSC and BBB promised before the elections that they would adhere to European budget rules. The PVV eventually reluctantly joined in, also because Omtzigt and Yesilgöz would otherwise not have come to the table.
The Dutch Central Bank and the CPB believe that in the current state of affairs, significant cuts are needed – estimated at around 17 billion – to safeguard the sustainability of public finances. The Council of State also agreed last week.
Some cuts and tax increases will already be in the sights of right-wing parties. The PVV wants to stop all art and culture subsidies and the VVD wants to in any case increase the VAT rate for cultural goods and services, which would yield around 400 million.
Wilders and Yesilgöz also want to cut development cooperation, emergency aid, mandatory international contributions and reception in the region. This yields around 5.5 billion, according to the calculation of the VVD program. Public broadcasting must also suffer. The VVD wants to cut it by 400 million, the PVV calls for abolition, which would yield approximately double that amount.
The problem is that NSC has little sympathy for such drastic measures. The enormous cuts that the PVV has in mind for nitrogen and climate policy are also unrealistic, according to the VVD. There does seem to be agreement that the National Growth Fund, which still has around 7 billion in cash, may disappear again. None of the parties are looking forward to major tax increases.
For example, the many billions needed to maintain the budget and fulfill its own promises appear difficult to find. The final week of the formation also threatens to become a reckoning with the last election campaign, in which, for the first time, several major parties did not have their plans taken into account.
The coming days will reveal what their promises were worth.
