September 19, 2017 - Each third Tuesday of September ('Prinsjesdag') the Dutch Government presents its plans and ambitions for the year ahead in the Speech from the Throne, delivered by His Majesty King Willem-Alexander. In addition, the Minister of Finance presents the budget for the upcoming year. We are pleased that we can share a summary with you, prepared by Public Matters.
Prinsjesdag - A Day of Rituals
- On Tuesday September 19, 'Prinsjesdag', King Willem-Alexander officially opened the parliamentary year, presenting the Government's plans and ambitions for the year 2018. In addition, Jeroen Dijsselbloem, Minister of Finance, presented the related budget.
- Key message was that the Netherlands is doing very well, but no major policy initiatives were announced as the current outgoing Government (which is now the longest-serving Government in Dutch democratic history) is in care-taker mode since the elections earlier this year, in March. Prime Minister Mark Rutte is still in negotiations to form a new coalition.
- Parliament has agreed not to hold the traditional General Debate on the 2018 budget this week. Instead, MPs will wait until the new Cabinet presents its plans to hold the debate on general government policy.
- As soon as a coalition agreement between the four parties involved has been reached (which is expected within weeks) and the new Cabinet is in place, the new Cabinet will follow through on its own policy measures, which may leave the outgoing Government's spending plans as insignificant.
- The presentation of the budget will be followed by a cycle of parliamentary debates on the budget, which will last until the beginning of December.
The King’s Speech - Key Elements:
- The Dutch economy is growing and we can see positive developments. More people are finding work, more people are buying homes and businesses are investing more. After a number of difficult years we are again seeing a flourishing economy and healthy public finances.
- After years of decline, the economy has been growing since 2014. This year and next year, growth of 3.3% and 2.5% respectively is forecasted. Many of the relevant indicators are positive: exports, consumption and corporate investment are growing. In addition, the central government's budget surplus is continuing to rise.
- Unemployment is falling rapidly and is expected to stay at 4.3% next year.
- Globalization is a fact to which we as a country must respond. Many Dutch people are reaping the benefits. But not everyone, and not in all areas. For example, Dutch workers have to compete with workers from other countries who are not always covered by or obliged to follow the same rules.
- In Brussels, the Netherlands continues to strive for a European Union that provides solutions to problems in the areas of security, migration, climate and energy.
- Combatting climate change is by definition an international task, to which every country must contribute. In the Netherlands, we are continuing to fully implement the Energy Agreement for Sustainable Growth, which is centered on the reduction of CO2 emissions.
- In order to better deal with the increasing risks and threats in the digital world, extra money will be made available to tackle cyber-espionage, cyber-sabotage and cybercrime.
- The King’s speech in English and in full can be viewed via this link.
Budget Proposal – Plans for 2018
- Total government income: €285bn | Total expenditure: €277bn
- Budget surplus to reach 0.8% of GDP
- National debt to fall to 54.4% of GDP
- Economic growth will be 2.5%, compared with 3.3% this year
- On average, people will have 0.6% more to spend, those in jobs will notice a 0.8% rise, those on benefits 0.3%.
- Unemployment is falling and expected to stand at 4.3%
- €435m extra for nursing homes
- €270m for primary school teachers' pay
- €116m for digital security and counterterrorism
- €425m to increase buying power of vulnerable groups
- €25m extra for the food safety board NVWA (Netherlands Food and Consumer Product Safety Authority)
- €75m extra for the tax office
- Policy deductible in health insurance ('eigen risico') to rise from €385 to €400 a year
- Health benefits will rise by an average €130 a year
Potential Impact on Business?
- The Dutch economy profits from the improved economic climate in Europe and beyond. However, an open economy also brings risks if foreign economies decline. To prevent economic downfall in times of crises, the Dutch Government wants to decrease the national debt. This creates room to invest in times of need.
- The growth of the economy and growing employment are not yet linked to an income increase. Increased flexibilization of the labor market and unused labor potential as well as the after effects of the economic crisis possibly play a role in the stagnation of salaries.
- Next year the cabinet will invest 6.2bn in infrastructure. This will result in 268km of new highway and development of new techniques to improve traffic flow. By investing in cleaner transportation the Department of Infrastructure contributes to achieving the goals of the Paris Climate Agreement.
- The Ministries of Economic Affairs, Foreign Trade and Finance are working on a national investment fund Invest-NL. This fund is intended for entrepreneurs seeking funding for investments and expansion of their business abroad. The Cabinet will make 2.5bn available for the Invest-NL investment fund.
- The Cabinet will structurally invest 26m in cybersecurity to increase digital security and to make way for innovation for a secure digital infrastructure. 2.5m will go to a Digital Trust Centre that will support SMEs in the protection against cyber threats.
- The annual Tax Plan contains only measures to maintain the necessary tax infrastructure and measures of technical nature without budgetary consequences. The incoming Cabinet will present their coalition agreement with possible new tax measures.
- In summary, the presented budget plan of the outgoing Government will have little impact on the current investment and business climate. Far more significant will be the coalition agreement between the negotiating parties.
Annex
Agenda - Planned
- September 19 – Budget Day ('Prinsjesdag')
- October 3-5 – Plenary debate about budget plans for the Ministry of Finance
- October 24-26 – Plenary debate about budget plans for the Ministry of Economic Affairs on Innovation
- November 7-9 – Plenary debate about budget plans for the Ministry of Economic Affairs on Agriculture
- November 14-16 – Plenary debate about budget plans for the Ministry of Foreign Affairs
- November 21-23 – Plenary debate about budget plans for the Ministry of Foreign Trade and Development Cooperation
- December 5 – Parliament votes on budgets and budgets are sent to the Senate
Agenda - Expected
- Coalition agreement – The four negotiating parties are expected to reach an agreement in the next couple of weeks. After a coalition agreement has been presented, a new Cabinet can be formed. The new Cabinet will likely try to adjust the budget plans to realize its own policy measures.
- Debate on the Government's statement and general deliberations – traditionally Parliament debates about the budget proposal in the same week as Budget Day ('Prinsjesdag'). This year Parliament decided to postpone these debates and wait for the new Cabinet to arrive. By postponing the general deliberations Parliament can debate policy changes with the new Cabinet instead of the outgoing Cabinet.
This update was prepared for you by Public Matters.
