Coalition budget talks still deadlocked with hours to go

Plans to cut more than €6 billion from social security and to change the way savings and investments are taxed are in the balance, as the three coalition parties struggle to agree next year’s budget among themselves with only hours to go before it is due for review.

D66, the VVD and the CDA negotiated through the whole of Sunday and into the early hours of Monday without reaching a deal, and are still talking on Monday afternoon. The meeting at which the full cabinet has to sign off the budget, first scheduled for 11am, has been put back twice and is now set for 6pm.

Until last week, the main question was whether the minority coalition could win enough opposition votes to pass the budget. Prime minister Rob Jetten ended those talks on Friday, saying the plans would go to parliament without a majority.

That has left the coalition parties to settle the budget between themselves, and they remain divided. Jetten acknowledged on Friday that the three parties still disagree fundamentally on some key points.

What they are arguing over
Broadcaster NOS reported that two issues are holding up a deal: the box 3 tax and the planned social security cuts.

Box 3 is the tax on income from savings and investments, which the government has been trying to reform for years. The coalition’s spending plans also include cutting more than €6 billion from social security – the benefits paid to people who are unemployed, older or too ill to work.

The largest opposition party, the left-wing PRO, has made scrapping that cut a condition of its support and wants wealthy households taxed more instead. Led by Jesse Klaver, PRO already won a concession from the government this year, when it dropped a plan to raise the retirement age more quickly.

D66 and the CDA want to avoid tilting the budget too far to the right, so as to keep PRO within reach. The VVD is wary of concessions to the left that could sour its relations with the far-right JA21 and the orthodox Protestant SGP.

The coalition could pass the budget through the lower house with JA21 and SGP support, but that combination would leave it well short in the senate, where PRO’s backing offers the more realistic route to a majority.

The draft is due at the Council of State, which reviews the plans before they are presented on Prinsjesdag on September 15.