Analysis

Rutte’s Liberal Party Shifts to Center in Netherlands

On environmental policy, government spending and wages, the party is moving to the middle.

Mark Rutte
Dutch prime minister Mark Rutte joins a debate in the European Parliament in Strasbourg, January 20, 2016 (European Parliament)

The Netherlands’ ruling liberal party has further moved to the center in its manifesto for the upcoming election, arguing that the coronavirus, climate change, American disengagement and instability in the European periphery call for a stronger state and a stronger EU.

It’s not sudden shift. The traditionally anti-statist and mildly Euroskeptic liberals have become more middle-of-the-road during the ten-year prime ministership of Mark Rutte, who will be seeking a fourth term in March.

They have overtaken their traditional rivals on the right, the Christian Democrats, who are polling at a mere 8-10 percent compared to 25-28 percent for the liberals — faraway in first place, but short of an absolute majority.

The manifesto therefore won’t be implemented in full, but it is telling the party is already signaling a willingness to move to the left in a future coalition.

The draft has yet to be approved by members. There are liberals who complain Rutte has been too willing to compromise with left-wing parties and left a space on the right for Forum for Democracy and Geert Wilders’ Freedom Party, which are polling at a combined 15-19 percent. But liberal rebellions against the party leadership are rare.

Here are the manifesto’s highlights.

Budget and taxes

  • Borrow to make up for lost tax revenues.

This is a change from the euro crisis, when the liberals insisted on spending cuts in the Netherlands and other EU countries to respect the bloc’s debt and deficit rules.

As a result of coronavirus, the Dutch government is borrowing the equivalent of 7.2 percent of GDP this year. Debt as a share of economic output is projected to rise from 49 to 61 percent.

  • Convert child, health-insurance and housing subsidies into tax credits.
  • Cut taxes for middle incomes and small and medium-sized businesses

Business

  • Exempt small businesses from certain collective bargaining agreements.
  • Simplify bankruptcy law.
  • Grow Schiphol airport and the Rotterdam harbor.

Left-wing parties oppose growing the airport, which is Europe’s fourth largest.

  • Invest in promising startups to avoid them falling into foreign hands.
  • Bar competition from state-owned and -backed companies from outside the EU.

Here Rutte’s party moves closer to the view of France’s Emmanuel Macron, whose push for “strategic autonomy” in the EU includes banning unwanted foreign investment and insisting on reciprocity in public contracts.

The liberals still oppose relaxing EU competition rules to allow big mergers and the creation of “European champions”.

Child and health care

  • Allow multiyear insurance contracts.

Currently all plans run for a year and Dutch consumers can only change plans at the end of each year.

  • Freeze the minimum health insurance copay at €385 per year.
  • But allow plans with higher copays.

The hope is that this will cut costs. The average insurance plan costs €120 per month, but the true cost is twice that, with the government paying the remainder from general funds.

  • Bar unvaccinated children from child care centers.
  • Make child care more affordable for working parents.

Crime

  • Ban gay conversion “therapy”.
  • Take Dutch passports away from jihadists.
  • Mandatory minimums for organized crime.
  • Invest in community policing and cybercrime.
  • Raise the maximum prison sentence for manslaughter from fifteen to 25 years.

Employment

  • Allow small companies to fire workers after one year of illness. (Currently two.)
  • Raise unemployment benefits for the first three months of joblessness. Lower benefits for the remaining period.
  • Introduce an unemployment insurance mandate for freelancers, except in agriculture.
  • Raise the minimum wage, but decouple social benefits — except pensions — from the minimum wage.

Liberals have long argued for decoupling social benefits from the minimum wage and tying them to costs of living instead. The minimum wage in the Netherlands is adjusted every six months in line with prevailing wages and currently €1,680 per month, one of the highest in the EU.

  • Reduce social taxes on full-time contracts.

This should make it more attractive for companies to hire workers full- as opposed to part-time.

Environment

Earlier in his political career, Rutte complained that “windmills rotate on subsidies.” He has since presided over the most ambitious climate legislation in Dutch history, including ending drilling for natural gas in Groningen, banning gas from new homes, lowering the daytime speed limit on Dutch highways and reducing nitrogen oxide emissions from farms.

  • Expand clean energy subsidies.
  • Heavy industries will pay a carton tax.
  • Meet the goals of the Paris climate agreement.
  • Gradually shutter coal-fired power stations.
  • Consider building additional nuclear power plants. (The Netherlands has one.)

Foreign policy

  • “Restraint” in EU enlargement.
  • Study alternatives to EU membership for Turkey.
  • Strengthen EU border defenses.
  • Harmonize pollution taxes across the EU.
  • Raise defense spending to the EU average — still below the 2 percent of GDP agreed in NATO.
  • No “European army”, but practical steps to improve military transport, jointly develop weapons systems and grow the European defense industry.

The Netherlands has taken a leading role in European military integration, jointly procuring frigates and minesweepers with Belgium, integrating its air defenses with the other Benelux countries and sharing its panzers divisions and largest navy ship with Germany. But “EU army” doesn’t poll well with right-wing voters.

Housing

  • Cap local property taxes, which now vary widely.
  • Create a national investment fund to support municipalities in building more homes.
  • Force residents to move out of social housing if they earn more than the qualifying threshold.
  • Put pressure on cities to enforce anti-squatting laws.

Immigration and integration

  • Introduce a points-based immigration system.

This would reduce low-skilled migration from low-wage countries in favor of high-skilled migration from developed countries (outside the EU — few restrictions on migration are allowed inside the bloc).

  • Ban all face-covering clothing in public.
  • Reduce social benefits for non-EU migrants.
  • Reform the Constitution, so freedom from discrimination takes precedence over freedom of education.

The constitutional right to freedom of education provides state funding to religious schools. The liberals are uneasy that some Islamic schools refuse to teach their pupils gay rights, gender equality and religious freedom.

Pensions

  • Reform the semi-public pension system (which is separate from the government pension system and run by employers and trade unions), so people can see at any time how much money they’ve put in and how much they will get upon retirement.
  • Give retirees a bonus if they work two years beyond the retirement age.

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