New Cabinet to increase healthcare deductible, keep mortgage interest reduction

94 days into the Cabinet formation process, and the D66, VVD, and CDA are ready to present their coalition agreement. Sources told AD that the agreement includes increasing the healthcare deductible by €75, keeping the mortgage interest deduction unchanged, and allocating €20 billion to addressing the nitrogen crisis. The Telegraaf also reported that the new Cabinet plans to push €100 million extra per year into the struggling prison system.

The D66, VVD, and CDA Cabinet reversed the previous Cabinet’s plans to cut the healthcare deductible in half. According to AD’s sources, they plan to increase the deductible from €385 to €460 next year. The agreement states that patients will not pay more than €150 per treatment on their deductible from 2028 onward, to prevent people experiencing financial hardship from avoiding needed medical care. They also set aside €350 million for supporting chronically ill people through the municipalities.

The parties also agreed to keep the mortgage interest deduction as is, AD’s sources said. That was a sticking point for VVD leader Dilan Yesilgöz, who promised her voters that the VVD “will not join a government that changes the mortgage interest deduction.” D66 and CDA wanted to phase out the deduction, which many economists warned is driving up home prices in the tight housing market.

The parties will introduce a “freedom contribution,” a tax to partially cover additional defense spending. The CDA had this tax in its election campaign. The three parties want to commit to the increased NATO target of spending 3.5 percent of the GDP on Defense. That means additional defense spending of €16 to €19 billion in the long term. They expect the “freedom contribution” to cover over €3.5 billion of that amount.

The new Cabinet also plans to allocate €20 billion to solve the country’s nitrogen problems. The Netherlands has been in “construction lockdown” since 2019 due to excessive nitrogen emissions - nothing can be built if the nitrogen emissions from the construction aren’t compensated elsewhere. This has really hampered housing construction in a very tight market, among other things. According to AD’s sources, the new Cabinet is returning to Rutte IV’s policy after Schoof I scrapped the majority of the nitrogen policy.

We also know from sources speaking to the Telegraaf that the agreement is titled “Getting Started.” The newspaper wrote that the new Cabinet is against joint EU loans, wants to keep the budget deficit below 2 percent, and has reduced the budget cuts to the Netherlands Public Broadcasting (NPO) by €50 million.

On Thursday evening, the newspaper also reported that the new Cabinet was dedicating €100 million extra per year to address the issues in the prison system. Dutch prisons are currently so full that inmates are being released two weeks before their sentence is up to create some room for incoming people.

The parliamentary factions of the D66, VVD, and CDA approved the coalition agreement on Wednesday night. On Thursday, party leaders Rob Jetten, Dilan Yeşilgöz, and Henri Bontenbal made some minor adjustments, requested by their parliamentarians. And at 1:00 p.m. on Friday, they will officially present their plans for the coming Cabinet term.

The new Cabinet will be a minority government. The D66, CDA, and VVD only hold 66 of the 150 seats in the Tweede Kamer, the lower house of the Dutch parliament. That means that they’ll need support from at least 10 opposition MPs to get any of their plans adopted. Their position in the Eerste Kamer, the Dutch Senate, is even worse. There, they hold only 22 of the 75 senatorial seats.