"Back to budget cuts": Finance Min's message in spring budget review

Minister Sigrid Kaag of Finance will announce that, after a few years of spending, budget cuts are back for the Dutch government, sources told the newspaper AD. Its time for the government to show some more discipline again, will be Kaag’s message at the presentation of the Spring Memorandum - the spring update to the national budget.

The government is at risk of spending more than previously agreed and than allowed under EU rules. According to the budget rules, the Cabinet must set an expenses ceiling for each Cabinet year at the start of the government’s term of office. The Cabinet can’t exceed that ceiling unless they compensate for the extra spending with budget cuts or tax increases in the same policy area. That mathematics is part of the Spring Memorandum, which the government must present to parliament before June 1.

In the past few years, the Dutch government spent billions to support citizens and businesses as crisis followed crisis. Over 80 billion euros went to get the Netherlands through the coronavirus pandemic. Kaag expects support for high inflation and energy prices after Russia invaded Ukraine to amount to 17 billion euros. But it’s now time to pull the purse strings tight again.

The Dutch Ministers have been meeting for weeks to try and fill massive gaps in the budget caused by - among other things - extra compensation for Groningen residents for decades of gas extraction and fracking earthquakes, and asylum shelter turning out much more expensive than budgeted. Exactly how the government will fill these gaps is still unclear, but sources told NOS that a previously proposed increase in the healthcare deductible is off the table.

Part of the Spring Memorandum is also paying for climate plans to achieve the Nethelrnads goals for 2030. Sources told NOS that the Cabinet was basically in agreement about the climate plans for the coming years. Prime Minister Mark Rutte, his deputies Sigrid Kaag (D66), Wopke Hoekstra (CDA), and Carola Schouten (ChristenUnie) discussed these plans late into the night with Minister Rob Jetten (Energy and Climate) and State Secretary Marnix van Rij (Finance) on Tuesday.

Mobility was particularly a complex topic in the discussion of climate plans. The VVD did not want stricter rules for diesel and petrol drivers, as Jetten has proposed. According to NOS’s sources, the Cabinet has now reached a compromise on this. “We’ve come a long way,” Rutte said after the meeting. Hoekstra said: “We’re almost done, but we still need [Wednesday].”