Future Cabinets must keep tight reign on finances, Rutte says; Budget debate today

Coming Cabinets must “really keep a close eye on things,” said outgoing Prime Minister Mark Rutte. The new Cabinet must “sharply guide” the after-effects of the coronavirus pandemic, the effects of high inflation due to the Ukraine war, and the high gas prices. The Tweede Kamer will also have to pay attention to government finances in the coming period, starting with the budget debate on Wednesday and Thursday.

“You can’t just spend extra money or increase taxes. And you have to pay attention to your competitiveness. We have to be careful not to kill the goose that lays the golden eggs,” Rutte said. The competitive position of the business community must not deteriorate, he said several times, speaking from his office in the Torentje after his last Budget Day as Prime Minister. “Don't use the business world as an ATM.”

On Wednesday and Thursday, the Tweede Kamer, the lower house of the Dutch parliament, will debate the budget presented by the outgoing Rutte IV Cabinet on Budget Day. The political parties will likely come armed with many proposals to reform the budget in such a way that more money becomes available for income support. During the budget debate, the parties will seek support for their plans.

The government allocated 2 billion euros to prevent poverty from increasing. But, several parties believe the amount is too little. There are plans on both the left and right to ensure people have more money left at the end of the month.

A majority seems to favor lower fuel taxes. The reduction in the excise duties on fuel the government previously implemented will expire if nothing is done. A liter of petrol may then become 20 cents more expensive. There are also plans to increase the minimum wage, to make public transport cheaper, and to cancel debts, for example. The costs for the plans could amount to billions.

It will, therefore, come down to finding financial coverage for the plans. Outgoing Finance Minister Sigrid Kaat and Rutte warned that not everything will be possible. Plans to finance one measure can hurt elsewhere.

According to Rutte, the significant increase in the minimum wage that several parties are proposing carries significant financial risks, especially if they maintain the link with the state pension. That costs the government billions, while the purchasing power problem does not lie with people with state pension benefits. The second risk is inflation.

This year’s budget debate cannot be seen separately from the approaching parliamentary elections in November. For two days, political leaders will debate with each other about the future of the country. At the same time, outgoing politicians are still on stage, while incoming leaders have to sit on the sidelines. Retiring Prime Minister Rutte will speak on Thursday but is no longer the VVD leader. The same applies to Jesse Klaver of GroenLinks, who will continue as parliamentarian but won’t lead the GroenLinks-PvdA faction after the elections.

Rutte’s successor, current Justice Minister Dilan Yeşilgöz, will have to sit on her hands for a while: although she is already VVD leader, she will have to listen to the MPs debate with the other Cabinet members in the coming days. The same applies to D66 leader Rob Jetten, currently climate minister. Frans Timmermans, the new leader of GroenLinks-PvdA, will not even be present at the debate because he is neither a parliamentarian nor a member of the Cabinet.

Not leaving Netherlands worse off than he found it, Rutte thinks

Although Rutte doesn’t want to look back yet - “I think that is so sad” and “I will be here for a while yet” - he believes he is leaving the country no worse off than when he started as Prime Minister 13 years ago. “Some things need to be done in the coming years. There are problems to solve,” Rutte said in a press interview in the Torentje after his last Budget Day as Prime Minister.

The national debt has fallen below 50 percent, the government deficit is (just) below 3 percent, and unemployment is “historically low,” Rutte summarized the positive results of his Cabinets. A few years ago, “unemployment threatened to reach 10 percent.” But there are also “serious problems” to be solved, such as the settlement of the benefits scandal and earthquake damage in Groningen. He also mentioned the housing market, the climate, and the equal opportunity crisis as examples. The nitrogen issue must also be gotten “under control.”

“That requires a step-by-step approach. I have really learned that in the past 13 years. Governing also requires finding that balance every time, keeping an eye on all those social interests. Especially in a rich country like the Netherlands, with an assertive population,”

His last Cabinet’s balance sheet is “not only positive,” he acknowledged. In addition to the problems mentioned, the government also couldn’t take measures to reduce the influx of asylum seekers. The Rutte IV Cabinet collapsed over this.

Rutte has not yet decided what he will do after stepping down as Prime Minister. Teaching is “still high on the agenda,” but he will only make a final decision “when I am really gone.” He doesn’t want to talk about it any further. “Let’s first make sure we leave the country tidy. I just want to finish my job well, and then we’ll see what happens.”