Labor market shortages will make Rutte IV plans hard to implement: Planning office
The new Cabinet wants to spend billions in the coming years to help the Netherlands move forward, but the question is whether they will manage it within the Cabinet term. After calculating the plans in the coalition agreement, the Central Planning Bureau (CPB) pointed to the severe shortages in the labor market. You can plan a lot of extra government spending, but it will be tough to find enough suitable personnel to carry out everything.
The CPB, an essential adviser to the government, assumes that not all planned funds can be spent within the government's term in office. This is particularly the case for plans in defense and housing. It is here that matters such as finding and training suitable personnel, supply problems, and the lead time of tender- and permit procedures play a significant role.
The CPB also warns that the large size of the package can have adverse side effects. According to the accountants, there is a risk that additional government spending will boost wages and prices rather than economic activity. And that while inflation is already high. The financial burden for future generations would also increase sharply because government debt rises, for example.
The made plans will result in the economy growing faster across the board than would otherwise have been the case. It is also expected that employment in the government and education will increase, and unemployment will fall. In the longer term, the coalition agreement would lead to a slight decline in structural employment, but also a somewhat more equal income distribution. The new policy would also ensure that the slight decrease in households' purchasing power is compensated slightly.
Unlike in the past, the coalition parties did not have their plans calculated by the CPB in advance, partly because not all measures have yet been worked out in detail. The idea is that this would give more room for Ministers and parliament to leave their mark on policy. But parliament was not satisfied with this and asked formateur Mark Rutte to have a calculation made before the debate on the government statement. That is on the agenda for Tuesday and Wednesday next week.
Reporting by ANP.