Need to cut costs? The fat years seem to be over and so the cabinet has to tighten its belt again. The question is how big the budget gap is and where the money should come from to fill it. The answers are in the spring memorandum, which will probably be published on Wednesday.
“You never know for sure. But I think we can work it out,” Prime Minister Mark Rutte said last week about the progress of the spring memorandum. So little certainty. That is not surprising in an uncertain year for public finances. “Guarantee to the front door”, Rutte therefore added.
The spring memorandum that Minister Sigrid Kaag (Finance) has been working on in recent months contains the adjustments to the current budget. There is also a preview of next year.
Usually a few hundred million euros are shifted. No significant changes to the total national budget, in which the government expects to spend just under 400 billion euros this year.
In recent years that has changed. Increasingly, the budget has to be adjusted considerably because of large, unexpected expenses. That could still be explained during the corona years. But that trend has continued. This is partly due to the war in Ukraine and the emergency packages that followed for the high energy prices.
Groningen will receive 22 billion for damage caused by gas earthquakes
Also this year there are numerous financial setbacks to which the cabinet and coalition parties VVD, D66, CDA and ChristenUnie have to find an answer.
First of all, there is the rising interest rate. The government is expected to lose more than 1 billion euros more this year as a result. Until recently, the government could borrow money for free and in some cases even received money thanks to the negative interest rate.
In addition, the cabinet will allocate 22 billion euros for the residents of Groningen over the next thirty years. The interests of the people of Groningen have been structurally ignored, according to the damning report of the committee of inquiry into gas extraction. The Netherlands therefore has a “debt of honor” to its inhabitants, the Commission of Inquiry ruled. The money for strengthening and repairing damaged houses is in addition to the 22 billion.
Cabinet estimates migration costs systematically too low
Then the shelter. It is almost an annual tradition that these costs are higher than budgeted. That was the case in 21 of the past 23 years, the Court of Audit concluded after an investigation.
This year too, more money will have to go to (emergency) shelters. This year, a lot more asylum seekers are coming to the Netherlands than the cabinet had taken into account, the NOS recently. It is precisely this crisis care that is more expensive than regular care.
Rutte acknowledged that the problem with the number of asylum seekers is bigger this year. Nor can he guarantee that everyone will have a place in the asylum seekers centres. The Prime Minister could not give the guarantee that people should not sleep outside – as happened last summer. “It is even possible that it will happen again,” Rutte said about this two weeks ago during his weekly press conference.
VVD guards against ‘citizen bullying’ in climate measures
The cabinet’s climate plans are also expected on Wednesday. The climate target of emitting at least 55 percent less greenhouse gases in 2030 compared to 1990 will not be achieved with the current measures, the Netherlands Environmental Assessment Agency (PBL) calculated.
Minister Rob Jetten (Climate and Energy) is therefore coming up with an extra package of measures. Many of these measures will come from the ‘choice menu’ that was recently presented by an official working group at the request of Jetten.
These mainly contain instruments that hurt citizens and companies financially because of higher taxes. The VVD does not want that. The party has already spoken of “citizen bullying” and feared that additional taxes will drive companies “across the border”.
Quite a challenge for coalition
The nitrogen crisis has already revealed that cooperation between the coalition partners is difficult. A government crisis is looming.
The extra costs and measures for climate and asylum only further strain relations.
For example, the VVD does not want any additional taxes for the business community and is also hesitant to tax capital more. The party has been preparing for cuts for months.
“If you want to spend more money, you also have to look elsewhere where you can do less,” said financial spokesman for the VVD Eelco Heinen last month. At D66 and ChristenUnie they have no problem raising more money from assets.
Finally, there are also different views on asylum. VVD and CDA want a stricter policy, while D66 and ChristenUnie again draw attention to a more humane policy.
The financial solution may be presented tomorrow, the political solution still needs to be debated vigorously.
2023-04-25 15:00:47
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