Dutch minority cabinet tweaks defence budget plan with delays and tax adjustments

The minority coalition led by Rob Jetten and Eelco Heinen will retain the intended increase in defence spending, but the financing package is being reshaped through postponements and partial cancellations. Cuts affecting care recipients, the unemployed and future pensioners are largely delayed, and the planned acceleration of the AOW age is abandoned. The “freedom contribution” tax rise is softened by raising a tax credit for employed people rather than eliminating the levy.

The Central Planning Bureau had warned that the overall fiscal package would slightly reduce household disposable income, but the revised plan narrows the projected shortfall. To stay within the EU deficit ceiling, the cabinet also proposes cuts to the civil service, a higher water tax, reduced tax relief for seniors and moving more workers into the top income-tax bracket. These moves aim to secure opposition backing and buy time for negotiations with unions and employers.