Stop moving financial risks forward, Council of State tells Dutch Cabinet

The Dutch government is too expansive in its budgeting policy, reserving too little money for dealing with future crises and moving too many financial deficits forward for future Cabinets to deal with. The Council of State came to this conclusion after studying the Spring Memorandum, the government’s spring update to the national budget. “The Cabinet steers too close to the guardrail,” the Council of State said.

It mentioned the 22 billion euros the government reserved to compensate Groningen residents for decades of gas extraction and earthquakes. The Cabinet decided to get most of that money through loans, increasing the national debt instead of cutting other expenditures. “These burdens will be passed on to future generations,” said State Councilor Richard van Zwol, according to NOS. Rutte IV decided to let future Cabinets deal with it.

The Council of State is concerned that none of the government’s accountants can state where the current economic growth comes from and how long the Netherlands will benefit from it. The Council urged the Cabinet to analyze this and devise future scenarios for the coming decade. “And not fragmented per ministry, but a coherent story,” said Van Zwol. “How is the labor market developing, what collective facilities will we need, and what is the influence of climate and climate policy?”

The Cabinet does not have such a plan, and without it, it and subsequent Cabinets can’t make sensible decisions about where to cut costs and where to invest, the Council said.

The Council of State also criticized the government’s poverty-fighting policy. The coalition parties had agreed to halve the number of children living in poverty. But the Central Planning Office (CPB) expects the number to increase to 7.1 percent next year.

Thom de Graaf, vice president of the Council of State, pointed out that they are asking the Cabinet for tough political choices because these are essential matters. “Unfortunately, this is not the first time we have asked for this,” he said.