The next cabinet must save 17 billion euros to keep public finances healthy. This is stated in a report by the Budget Space Study Group, a club of top civil servants that advises politicians on financial policy.
After years in which the government let the money flow, it is now time to tighten our belts, is the message from the Study Group. Without intervention, the budget deficit will increase rapidly in the coming government period. From 2026, the deficit threatens to exceed the European 3 percent limit.
To prevent this, the next government must aim for a deficit of 2 percent of gross domestic product. Converted into euros, this requires savings of up to 17 billion euros structurally per year. By maintaining a margin compared to 3 percent, officials say, they contribute to ‘a stable debt and therefore healthy government finances’.
The next government basically has two options for saving such an amount: it can increase taxes or cut back. Top officials say both will be necessary. They do emphasize that people and companies are affected in both cases. ‘Sound public finances are and remain a way to ultimately ensure good education, good care and safety for everyone. Therefore, ensure sensible reforms, take into account measurement and implementation and look at both increasing taxes and reducing expenditure.’
In general, the Dutch economy is in quite good shape. The prospects are ‘good given the circumstances’. Yet doing nothing is not an option, officials believe. ‘Now is the time to build up buffers for economically worse times in order to be able to absorb future setbacks.’
Tradition
It is a tradition in The Hague that the Budget Space Study Group provides advice prior to the House of Representatives elections. This makes it clear to all parties – and voters – how much financial room there is in the next government period. This is the seventeenth time that an advice has been issued. The Study Group is chaired by the Secretary General of the Ministry of Finance, Bas van den Dungen. It also consists of senior civil servants and directors from other ministries, the Central Planning Bureau and De Nederlandsche Bank.
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2023-09-11 14:00:05
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