Dutch budget deal freezes social rent, adds childcare money; Boosts Defense spending

The four governing coalition parties reached an agreement on the spending plans to be included in the annual Spring Memorandum on the budget. The deal was reached on Wednesday morning after lengthy negotiations that continued into the overnight hours. The agreement, or Voorjaarsnota, includes plans to reduce taxes on energy, more money for childcare and social advocacy, freezing social housing rental prices, and increased spending on defense and national security.

However, it is still unclear how the Cabinet will come up with the means to pay for the plans. VVD party leader Dilan Yesilgöz-Zegerius said there will definitely be cuts, but the four coalition leaders, Prime Minister Dick Schoof, and the Cabinet members have yet to specify what those will be.

PVV leader Geert Wilders first announced that a deal was made on social media. He said that social rental rates will be frozen in 2025 and 2026, with rent allowances being raised. This will cost a billion euros, he wrote on X, and will help many of the lowest-income households in the Netherlands.

Other parties in the governing coalition soon followed, sharing lists of highlights regarding the terms of the agreement. Over 1.1 billion euros will go to the Ministry of Defense in order to ensure the country’s safety, Yesilgöz-Zegerius said on X. She said that this will happen without future generations having to pay for it.

The VVD leader also confirmed that cuts to child daycares will be scrapped and energy bills will be reduced. “They were exceptionally long negotiations, but we are in agreement,” said Yesilgöz-Zegerius.

Freezing some excise taxes, like those on alcohol and dairy, were also mentioned by the smallest coalition party, BBB. “There is a deal,” BBB leader Caroline van der Plas also wrote on X. “After 10 days and the last 25 hours, we agree about the #Voorjaarsnota.” She shared a photo of her smiling with a member of her party, Henk Vermeer.

She noted 1.9 billion euros earmarked for the Nedersaksenlijn, a train route to connect Groningen, Emmen and Almelo along the eastern border of the Netherlands. She also pointed to 600 million euros in increased support planned for the farming sector, and hundreds of millions of euros for different traffic and infrastructure projects.

Broadcaster NOS reported that there has been talk of more money being given to the municipalities. However it is currently unclear how this will be financed and what the fees or distribution will look like.

There were numerous financial issues. The Justice Ministry called for hundreds of millions to be spent on the prison system, the Ministry of Defense were asking for billions of euros in investment, and the Ministry of Finance still needed a financial solution in order to avoid a VAT increase on culture and sport. Sources claim that this gap has been filled by reducing income tax by less than originally planned.

It had been clear for a while that the parties were struggling to find a compromise that suited all four coalition parties. “That will be a difficult puzzle to complete,” Prime Minister Dick Schoof said about the spring memorandum, which is the annual update to the national budget.

The Cabinet is required to update Parliament on the current year’s budget by June, nearly four months before the presentation of next year’s budget proposal. Nicolien Van Vroonhoven of the NSC described the negotiations as “a beautiful and nocturnal battle for people's livelihood!"

The memorandum will be discussed in the Council of Ministers on Thursday. The regular weekly meeting of Cabinet ministers was moved up a day this week due to Good Friday.