Cabinet finally reveals its plans: Asylum "emergency", income tax relief, more housing

The first Cabinet of Prime Minister Dick Schoof has finally presented an in-depth look into its policy initiatives and plans for its full four-year term. The plans, presented on Friday, cover a wide range of topics, key among them being the intention to declare the asylum situation as a national emergency so it can sidestep Parliament and enact a severe and rigid approach to those seeking asylum in the Netherlands.

The 138-page document from the Cabinet also includes its intention to modify the income tax system to provide more relief for lower income households, and new investments to meet the target of 100,000 residential homes built annually. It also proposes reducing the health insurance deductible by 57 percent within a few years.

The document was released nearly four months after the PVV, VVD, NSC and BBB announced their coalition with a thin set of policy initiatives that was vague and with few details. Schoof's Cabinet was sworn in on July 2, with a stated goal of developing a full platform shortly after the summer.

However, getting to this point has been contentious, especially as the process overlapped with the Cabinet's first annual budget proposal. Harsh fights among the leaders of the four parties nearly caused a breakdown in talks, similar to when they negotiated the coalition agreement earlier this year. NSC party leader Peter Omtzigt said he was going on leave for health reasons soon after the budget deal was locked in, and he will not be present for debates on the budget in Parliament.

A pervasive lack of trust between Cabinet members and the coalition parties, and their lack of political experience, has also kept public support at a minimum. Just 39 percent of the public has confidence in the Cabinet's abilities. Nearly 70 percent of the public believe the coalition will fall before the end of its four-year term. Confidence is also low among those who voted for the coalition parties.

Asylum emergency will be declared, but not without controversy

The Cabinet confirmed its intention to declare the asylum situation as an emergency, which will be activated by Prime Minister Dick Schoof and Asylum and Migration Minister Marjolein Faber. It makes it possible to deviate from established law regarding the treatment of foreign people, and also lets the Cabinet suspend the law regarding the even distribution of asylum seekers across the Netherlands. Both of these can be done without approval from the Tweede Kamer and Eerste Kamer, the lower and upper houses of Parliament.

Should the move stand up to legal challenges, the Cabinet will temporarily stop issuing any decisions on asylum applications. It will also reduce capacity for receiving asylum seekers in the Netherlands, and will begin forcibly deporting people who have not been issued a residence permit. Additionally, adult-aged children of asylum seekers will not automatically be allowed entry into the Netherlands, and attempts to re-file or appeal asylum decisions will be dealt with more harshly.

The Cabinet claimed "high influx" of asylum seekers as being the reason for implementing such a measure, however the most recent figures show the numbers of arriving asylum seekers to be falling. Overcrowding in the asylum chain has been linked to successive Cabinets' refusal to make structural investments in asylum reception, and several constitutional law experts told RTL Nieuws they think the decision to declare a national emergency is an abuse of power at best, and unconstitutional at worst.

Faber also wants to stop issuing permanent residency permits to those who arrived as asylum seekers, and have lived in the Netherlands for five years. "This means that they must return to their country of origin as soon as it is safe there. The declaration of undesirability will be expanded. This will allow asylum seekers who commit crimes to be deported more quickly," her ministry stated.

The Cabinet will also attempt to redefine "the nuclear family" with regard to family reunification in proposals it will send to the country's highest court, the Council of State. "Family reunification will only be possible for the vast majority of asylum seekers if someone has a permanent place to live, a suitable income and a residence status for at least two years," Faber's ministry wrote in a statement.

Reducing income tax for some, reducing tax credits for others

The Cabinet also provided some additional clarity about its plans for the income tax system, confirming that it will not only introduce a third income tax band for the progressive system, but also that the first income bracket rate will be lowered. Until a few years ago, the Netherlands had four income tax bands, which Mark Rutte's third Cabinet consolidated into two bands as a means of simplifying the system.

However, this measure will be somewhat offset for many households by a reduction of the general tax credit. The Cabinet did not state the exact reduction of the popular credit, which is equivalent to 3,362 euros for those earning up to 24,813 euros. Those earning above that threshold receive a credit equal to 6.63 percent of their income, to a maximum of an additional 3,362 euros.

This is meant to introduce a policy that gives relief to working households, but without focusing on "leveling" the playing field or bridging the wealth gap. The Cabinet said it wants to "make work more rewarding." The Cabinet specifically said it wants a "balanced purchasing power" approach, which offers more support for vulnerable groups and middle-income households where people are employed.

Housing policy to tackle shortages

The Cabinet also wants to continue to try to reach the previous government's target of building 100,000 homes per year. Some of the proposals presented in the platform have been made by past governments, like "making better use of existing buildings," including the conversion of offices into homes.

It will contribute a total of 5 billion euros to meet this goal over the next five years to meet these targets. "This will support, among other things, the construction of more affordable housing for low and middle income households. For example, municipalities will receive a realization incentive: a fixed amount for each affordable home they realize," the Cabinet's platform stated. Another 2.5 billion euros will also be allocated in infrastructure investments make these new homes able to be reached more easily.

As was previously reported, the Cabinet will propose reducing the real estate transfer tax for investors and second homes to 8 percent starting in January. "This makes it more attractive to invest in rental properties. Every little bit helps," the Cabinet said. The Cabinet also wants to be able to make it easier to rent out spare rooms on a structural basis, and for multiple families to share a home.

Additionally, the Cabinet will propose changes to legislation and regulations to make it possible to add more residential units to a property by building additions, or by splitting up homes. "Housing construction is often unnecessarily delayed. New homes are added more quickly through more efficient processes and procedures and more conceptual and industrial construction. In addition, unnecessary and delaying regulations will be scrapped as much as possible," the Cabinet said.

Reduced health insurance deductible, but longer waiting lists for healthcare providers

Those living in the Netherlands can also expect to see a reduction in their health insurance deductible, the Cabinet said. The issue was also a campaign point for several parties ahead of last November's election. "Too many people do not go to the doctor or postpone care because they dread the bill. In a prosperous country like the Netherlands, it cannot be the case that people avoid healthcare for financial reasons," the Cabinet said.

The annual health insurance deductible will remain frozen at 385 euros for both 2025 and 2026. The deductible will then fall by 57 percent to 165 euros starting in 2027. Additionally, those who receive covered medical care in a hospital will not receive a bill of more than 50 euros, meaning the entire deductible cannot be charged for one single healthcare visit.

The Cabinet said it is already working on legislation about this, but it will also have consequences. "The expectation is that with a far lower deductible, more people will be referred to a medical specialist when they have complaints," the document stated.

Waiting lists will become longer for specialists, and there will be a need to triage patients. "The care recipient with the greatest urgency will be the first to be removed from the waiting list," the Cabinet said. The increase in referrals will take place simultaneously with a growing staff shortage in the healthcare and welfare arena. Current projections suggest healthcare providers will be short by nearly 200,000 employees in ten years' time.

Artificial intelligence is one solution the Cabinet will propose. The political leaders think that the administration time needed to prepare for a patient consultation can be reduced from seven minutes to 16 seconds, making it possible for doctors to see more patients.