All groups in society in the Netherlands will be better off in the coming years, prime minister Mark Rutte said at the presentation of the new coalition government’s plans.

The 70-page agreement, thrashed out over a 4.5 month period between two Liberal and two Christian parties, is ‘ambitious and balanced’, the prime minister told reporters at a press conference within the parliamentary complex on Tuesday..

‘We have put together a package which will ensure that everyone in the Netherlands will be better off,’ he said. ‘More money for those in work, for the elderly, for neighbourhoods and for children. This is an agreement from which the normal, ordinary Dutch person, will really benefit.’

The main points:

Income

• The new coalition will shake up the income tax system by cutting the number of tax bands from four to two from 2019
• The change will cut the tax bill of someone earning €40,000 by €1,200 a year, but middle and high earners will benefit most. In total, the tax cuts will cost €5bn
• The new system will involve an income tax rate of 37% on earnings up to €68,000 and 49.5% for all income above that. Currently taxpayers are charged roughly 36.55% on earnings up to €20,000, 40.8% on earnings up to €67,000 and 52% above that
• The 30% ruling for expats will be reduced from eight to five years

Work and benefits

• The contract system (BBA) for freelancers will be replaced
• Freelancers will have to earn at least €15-€18 an hour to be classed as self-employed
• Paid paternity leave to be extended from two to five days in 2019 and new fathers will also be allowed to take a further five weeks off at 70% of their regular pay from 2020
• Child benefits will go up by a total of €1bn
• The pension system will be overhauled

Mortgages

• The new coalition will reduce the rate at which mortgage holders can deduct interest from tax
• The deduction will be reduced in four stages of 3%, so that by 2023, home owners will be limited to a 37% deduction. The current rate is 49.5%. The impact of this on people earning over €68,000 a year will be limited by cuts in income tax
• Home owners who still have a mortgage to pay an extra tax (eigenwoningforfait) every year based on the official value of their homes. That tax is currently 0.75% but will be reduced to 0.6% to compensate for the reduction in mortgage tax relief
• This tax will also be gradually extended to people who have already paid off their mortgages over a 30 year period

Asset tax

• 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 parties have also agreed to cut the effective tax rate itself, with is currently around 4%, well above actual returns booked on savings

Other taxes

• 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
• Some form of road pricing will be introduced for road freight traffic
• Energy taxes will go up
• The tax on tobacco products will increase

Employers

• The new cabinet is to cut the basic rates of corporation tax from 25% to 21% while a tax rate of 16% will be levied over the first €200,000 in profits
• The cuts are to compensate for other changes which will require firms to spend more on sustainability and reaching climate targets, the sources said
• Employers with up to 25 members of staff will only have to pay one year of sick pay, rather than two, as at present
• Employers can employ people on temporary contracts for three years rather than two, as at present
• The 15% tax paid by firms on the dividends they pay out to shareholders will go in an effort to make the Netherlands more attractive to foreign firms
• Some form of tax on royalties and interest will be introduced

Refugees

• 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
• Local councils will be responsible for paying for refugees’ housing and health insurance directly, as well as helping them find work and settle into the Netherlands
• While commercial ‘inburgering’ agencies will remain, the government will impose tougher standards on them
• The four parties have decided it is ‘too legally complicated’ to make changes to the much criticised amnesty for child refugees, which allows some children considered to be well-rooted in the Netherlands to stay
• Eight locations for emergency hostels for rejected refugees who can’t or won’t leave will be established
• Refugees will only be given residency permits for three years, rather than five years as at present

Education

• An extra €770m will be spent on primary teachers pay and improving working conditions
• There will be a stronger focus on good citizenship in primary schools with lessons about the Dutch national anthem, the Wilhelmus, and compulsory visits to the Rijksmuseum and parliament
• All 18-year-olds will be given a book about Dutch history
• University and fees for first year students will be cut by €1,000 to around €1006. The fee will be cut for two years for students at teacher training colleges
• Youngsters without any form of qualification which will help them get a job will have to stay in education until the age of 21

Healthcare

• There will be a ‘broad social discussion’ on euthanasia
• It will be easier to create human embryos for medical research into serious illnesses
• €2.1bn will allocated to care of the elderly and nursing homes
• No change to the health insurance own risk payment of €385

Crime

• The maximum sentence for inciting hatred to be doubled to two years
• ‘Outlaw motorbike gangs’ are to be banned
• Fines will be increased for repeat and serious traffic offences
• Prisoners will not automatically have their sentences cut by one third for good behaviour. Instead, the maximum reduction will be two years
• Experiments with regulated marijuana production by licenced growers
• Pimping will be banned and a licencing system for prostitutes will be introduced
• It will be a criminal offence to send revenge porn
• Radical organisations which want to undermine democracy will be banned

Climate

• More sections of the North Sea will be earmarked for wind farms
• No new homes will have gas heating
• The national climate targets will be incorporated into law and by 2030, CO2 emissions should be cut by 50% compared with 1990
• All coal-fired power stations will be closed by 2030

Other measures

• More options to have dual nationality, for both immigrants and emigrants
• €40m to strength Dutch diplomatic presence abroad, reopen embassies and consulates
• Youngsters will be given priority in government jobs if they have carried out some form of voluntary community work
• The government is to stop asking people to fill in their sex on official forms when not relevant
• Anti-discrimination legislation to be extended to include handicaps and sexual orientation
• A one-off increase of €1bn on the development aid budget
• There will be a move towards introducing elected mayors
• €1.5 bn in extra spending on defence
• €2bn extra for infrastructure, roads, public transport and bike paths

The coalition agreement in Dutch