Dutch PM can't convince opposition of dividend tax alternatives

The new plans of the Rutte III government now that dividend tax will not be abolished, can not count on the support of the opposition parties, was revealed during a parliamentary debate on Tuesday evening. The opposition parties were all clearly irritated, NU.nl reports.

As dividend tax will stay in place, the government has the around 2 billion euros annualy that the measure would have cost to spend. The government and coalition are determined to spend that money mainly on the business community by lowering profit tax. They will also take other measures that will benefit businesses. In this way the government hopes to improve the business climate in the Netherlands - the same goal they had with the abolition of dividend tax.

The opposition, on the other hand, wants to spend that money on the public sector - more money for healthcare, education and other public services. There was also a call to reverse the planned increase of the low VAT rate. But as the coalition has a majority in the Tweede Kamer, the lower house of Dutch parliament, they do not need the opposition's support to push their planned measures through. 

The opposition parties quickly realized that the money saved by keeping dividend tax would not be spent as they want it, so they turned their attentions to the actions of Prime Minister Mark Rutte, according to the newspaper. Over the past year Rutte always defended the abolishment of dividend tax, repeatedly saying that scrapping the measure would be an "irresponsible risk". 

On Tuesday Rutte acknowledged that he had been damaged by the dividend tax discussion over the past year. "It's a scratch", he said, but added that collecting scratches is part of his job. "Otherwise I'm not doing my job properly." 

Now that dividend tax will not be abolished, SP leader Lilian Marijnissen, GroenLinks leader Jesse Klaver and PvdA leader Lodewijk Asscher want Rutte to retract his statements about "irresponsible risks" and admit that he was wrong in his assessment. "Don't beat around the bush and say: it is not an irresponsible risk. That would be a step towards restoring confidence", Klaver said. Asscher: "Leadership is also about admitting your mistakes. This is a mistake." Marijnissen: "You have gambled and lost. Admit it now."

But Rutte would bend no further. He called the new plans a "sensible package" and pointed out that the government is already investing 6.5 billion euros extra into the public sector. And not abolishing dividend tax is a risk, he said. "Whether it is irresponsible remains to be seen." 

The new package of measures does not focus on a specific goal, as the abolition of dividend tax did. The abolition was intended to tempt companies active in both the Netherlands and the United Kingdom to settle in the Netherlands. The British do not impose dividend tax and therefore have a competitive advantage, Rutte said. "There are risks and they remain." According to the Prime Minister, the new plans take away some of those risks.

Rutte's failure to admit mistakes and the coalition's refusal to invest at least part of the 2 billion euros in citizens instead of companies, resulted in PVV leader Geert Wilders filing a motion of no confidence against Rutte. The motion received support from the SP, PvdA, PvdD, DENK and FvD. That amounts to about a third of the Kamer, but not a majority, so the motion did not pass. The support of the PvdA for this motion is striking - Asshcer's party hardly ever uses this parliamentary power.