Section: Government

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Photographers taking pictures of the new Cabinet and Queen Beatrix

Policy statement

Building bridges

This is the translated text of the government statement of policy on taking office as delivered to the House of Representatives of the States General by the Prime Minister, Mark Rutte, on 13 November 2012.

Madam President,

The government I am presenting to the House today, representing the People’s Party for Freedom and Democracy (VVD) and the Labour Party (PvdA), is the logical outcome of the election on 12 September. When two parties so clearly emerge from an election as the largest, this creates a special responsibility for them to bridge the divide between them. To join hands and find a way forward together. In this case both parties were eager to fulfil the voters' mandate. And as first the prime minister-designate and now prime minister of this new coalition, I am pleased that we succeeded in doing so.

Before discussing the nature and the plans of the new government, I should like to express my thanks to a number of people. First to Henk Kamp and Wouter Bos, who, as mediators, explored the options for forming a coalition. They led the negotiations with energy, wisdom and vigour, and – together with their excellent support staff – did everything they could to make this result possible.

I should also like to mention the members of the previous government who are not returning to office. I know from first-hand experience with what dedication and commitment deputy prime minister Verhagen and my other former colleagues served the public good during the term of the last government. We owe them a debt of gratitude.

And lastly, Madam President, my thanks go to you and your predecessor. Not only for the hospitality of this House and for the support you extended to all those involved in the negotiations leading to the formation of this government. But also for your assistance in ensuring the smooth progression of the new procedure despite everyone’s unfamiliarity with its exact course.

On Monday 5 November the formation of the government was completed in accordance with the relevant provisions of the Constitution. On the basis of my report and my recommendation to act upon it, Her Majesty the Queen signed the various Royal Decrees and swore in the members of the new government. During the formation process Her Majesty received Mr Kamp and Mr Bos, the mediators, once, and I kept her informed of the procedure during the formation process.

Madam President, the Netherlands deserves a definite course of action. Not dogmas but breakthroughs that will enable the country to weather the crisis and emerge stronger on the other side. This was – despite all the substantive political differences between the VVD and the PvdA – an important point of departure in the negotiations. By accepting the differences in the programmes of the two parties, we have given ourselves the freedom we need to take some tough decisions in the interests of our country’s future. Because major decisions are needed and painful steps are unavoidable – Dutch society is fully aware of this unpleasant truth. People understand, perhaps better than ever, that the crisis will not end by itself and that we will all have to help pay the bill. And since the crisis began, the bill has risen considerably. Today the government is presenting you with a package of €16 billion in cutbacks and increases in the tax burden. And from 2010 to 2017 the total will amount to €46 billion.

Madam President, this widely shared understanding throughout society that difficult measures are unavoidable has laid the foundation for this coalition agreement. It will make it possible to implement the agreement over the next several years. But we cannot take people’s understanding for granted, or their willingness to bear part of the burden. The political events of the past two weeks have demonstrated this clearly. There was considerable agitation about the impact on people’s purchasing power of one specific measure in the coalition agreement. People rightly ask themselves: what exactly do all these plans mean for my future and my family's future? Many questions and concerns have arisen. Calculations have been made on many kitchen tables. And particularly when politicians make high demands on people, calm and confidence are crucial to winning the greatest possible public support. The fiscal solution presented yesterday will still have negative effects on the purchasing power of large groups of people. There is no way to avoid this if we are to achieve €46 billion in economies. But our solution does take account of all income groups and contributes to a more balanced result across the board. What’s more, the fiscal instrument that we have now opted for will make it easier to make adjustments, fiscal year by fiscal year, if undesirable effects on purchasing power emerge.

Madam President, this agreement, with its clear choices and breakthroughs, is in keeping with the national and international context in which this government begins its work. Throughout the world, and certainly in Europe, the economy is in a bad way. The Netherlands, with its open, international economy, has been hard hit. A stable euro and the proper functioning of the EU’s internal market are essential to the prosperity of our country. The government will therefore continue to exert itself for both, in the knowledge that there are no easy, painless solutions to the current debt crisis. We are willing to help other countries in order to strengthen the European Union and the euro, but not at any price. Our support must go hand in hand with proven efforts on the part of member states to solve their financial problems and strengthen their economies.

In our own country, too, we must face reality. For some years to come our economic growth figures will be lower than we have been used to. This time, unlike in the past, we will not be able to grow our way out of the crisis. Everyone, without exception, will feel the financial pinch. The government is fully aware of this. But failing to face reality would in the end cost us even more.

Madam President, this serves to explain the nature of this coalition agreement. We are making choices and taking tough decisions. However characteristic that may be of the government now taking office, if I look back at our parliamentary history I believe we are not doing anything very unusual. In the past, Dutch politicians have often shown in difficult situations that they can reconcile differences and take robust measures. Take the Pacification of 1917, when at a stroke the Cort van der Linden government resolved the financial position of private education and introduced universal male suffrage. Or the broad-based governments headed by Prime Minister Drees after the Second World War, which kept tight control over the post-war reconstruction process. Or take the Wassenaar Agreement of 1982 and the reforming governments led by Prime Minister Lubbers. Or even the spring of this year, when a number of the parties in this House abandoned entrenched positions in the interests of agreements on the 2013 budget. The present government stands in this tradition. A tradition of close consultation and open dialogue: between the House and the government on the one hand and between The Hague and the social partners, local authorities and other civil society players on the other. And I would also say: a tradition of decisiveness and a willingness to face up to problems.

Against the background of that tradition and that outlook, Madam President, the VVD and the PvdA worked on a package of real choices. Our agreement will build not barriers but bridges. Between the present and the future. Between people. And between generations. It is an agreement that lays out major reforms, without taboos, and sends a difficult but realistic message to the public at large.

Our message rests on three structurally related pillars.

  • First: a solid budget. In other words, a budget that meets the challenges we face. At present the government spends €17 billion more than it receives every year and every year we have to pay out €10 billion in interest – money that we cannot spend on valuable things like education, roads and care. This government has decided not to put off paying the bills. Only if we put public finances in order now can we keep interest payments manageable and maintain our system of benefits and services at its present level for the longer term. To that end we will make an additional €16 billion in savings so that at the end of our term in office we will be within sight of a balanced budget.
  • Second: an equitable distribution of benefits and burdens. The Netherlands will continue to treat its people decently. We have opted for an approach in keeping with the best Dutch traditions of thrift and solidarity. We shall not abandon people in need. And we shall require something extra from people who are doing well. The package as a whole will reduce the differences between people on higher and lower incomes. In this way we will spread the pain evenly: between rich and poor, between healthy and ill, between young and old, between private citizens and the business community.
  • Third: a sustainable and innovative economy. With extra investment in top-level research and the quality of education, to strengthen the economy. With the fewest possible obstacles for enterprise. With an eye to the international position of our companies. And with greater focus on future-oriented green growth in sectors where the Netherlands can seize opportunities, such as energy, water, agriculture and logistics.

Madam President, the core of this government’s vision lies in these three pillars – and above all in the connections between them. They reinforce each other. A manageable national debt with the lowest possible taxes is good for the economy and will keep our social security system affordable. Boosting our country’s capacity for growth will make it easier to spread the burden more evenly and will help bring the national debt under control. And ensuring that each contributes according to their ability so that no one falls through the cracks is the best guarantee of a future in which the maximum number of people have the opportunity to help make this fine country as strong as possible.

Madam President, after the presentation of the coalition agreement there was considerable discussion of a number of specific measures in it, including in the debate in this House with the mediators. This discussion will undoubtedly continue over the years to come and the government will conduct the debate frankly and openly. Today I should like to take the opportunity to outline the main points of the agreement against the background of this government’s overriding objective: to ensure that the Netherlands emerges from the crisis on a solid, socially responsible footing and to strengthen our country for the future.

The first important theme is that of work and income, which affects the very basis of everyone’s life. After all, employment and economic security are essential to enabling people to develop and to participate actively in society. Working with the social partners this government intends to tackle the major issues in this area, needless to say within the limits of what is financially possible. We must economise. There is no getting round that necessity. Our social security system – along with health care – is the area in which it is most difficult to keep provision affordable for future generations without taking drastic measures. But in addition this government sees an opportunity to work with employers and trade unions on a social agenda and the labour market of the future.

The essence of our plans is that we will ask more from people where possible. At the same time we will provide extra protection where necessary. Yes, the date from which people will have to spend more years at work will be brought forward. But we will take account of people who have not been able to make provision for this change. Moreover, employees on low incomes will be eligible for a bonus if they continue working. As is also fair, we will take steps to stop benefits accumulating within households, and will expect everyone on social assistance benefit to do something in return for their benefits and to do their utmost to find a job.

All our efforts in the labour market over the next few years will be geared to making the transition from one job to the next as short as possible and improving the position of older employees and flexible workers. By opening up the lowest pay scales for public servants we can ensure that more people at the lower end of the labour market can find paid employment, for example in cleaning and catering. That will afford them greater security. Reducing the level and the duration of unemployment benefit and redundancy pay is unavoidable: not only to save expenditure but also to spur people on to find work. The Employment Capacity Bill will be replaced by a new Participation Act, with quota provisions that will oblige large companies to employ disabled persons. In this way, more people will have a chance of mainstream employment and we will save on benefits under the Work and Employment Support (Young Disabled Persons) Act (WAJONG) and on the costs of sheltered employment. The municipalities will play a major role in this area.

As I already said, Madam President, major, painful steps in health care are also unavoidable. The coalition agreement includes many measures in this field, all of them with two objectives: enhancing quality and saving money. Fortunately, the two often go hand in hand. For example, when expensive, difficult procedures are made available at fewer hospitals while less complex forms of care are provided closer to the people who need it. The latter means making an extra investment in district nursing. This is good news for patients and will ease the burden on out-of-hours GP services and hospitals. We will tackle overtreatment, surplus capacity and waste, for example by charging more for visits to accident and emergency units. This will raise cost consciousness, promote cost control, and safeguard the future of a system based on solidarity.

Equally far-reaching are our proposals concerning long-term care and welfare services, above all those covered by the Exceptional Medical Expenses Act. The costs of these services have been rising sharply for years. This government means to reverse this trend specifically to assure the people who depend on this form of care that they can count on it in the future. To this end, we are asking people who can afford it to pay for a number of services themselves. Some forms of provision will clearly be eliminated or cut back. But this need not lead to lower quality. We are convinced that the closer to the patient this kind of care – often very practical and patient-specific – can be provided, the better. Not only in people’s own interests, but also in the interests of efficiency. So this is the road we will be taking, together with the local authorities, who will be given all the scope they need to provide customised care.

Madam President, in the housing market the government is opting for calm and clarity so as to get the market moving again and allow people to move up the housing ladder. Both the rental market and the property market are wholly stagnant at the moment, and there is a wall between the two that we have to dismantle, brick by brick. This is why people with relatively high incomes living in inexpensive social housing will have to pay a higher rent. And this is why we’re being clear about mortgage interest tax relief, so that people buying a home for the first time and homeowners with plans to move can do so with less trepidation. In this way we can slowly but surely end the stagnation in the housing market, which in turn will benefit the construction industry. This will also be good for mobility in the labour market.

Madam President, the coalition agreement contains only one chapter on sustainable growth and innovation, but strengthening our economy’s capacity for growth is the leitmotif of our plans through the whole of the agreement. I already mentioned the connections between major reforms, for example to the labour and housing markets, and measures to strengthen the structure of our economy. We will reap later what we are sowing now. This year we have seen the Netherlands return to the ranks of the world’s five most competitive economies. To further improve our position, we will invest more in fundamental research, and will continue to promote closer cooperation between the business community and academic and research institutions, in line with our successful leading sector policy of the last several years. We will strengthen our country’s capacity to innovate by raising our targets for clean energy and greening the economy; the Netherlands has everything it needs in fields like water and agriculture to play an even greater international role in greening the economy and enhancing sustainability. We will also continue to invest in sound infrastructure, and will eliminate red tape that gets in the way of entrepreneurship. We will reduce the costs of the regulatory burden by a total of €2.5 billion, thus giving society much-needed room – and air – to breathe.

Education is crucial for our economy’s ability to grow. It is the foundation of the innovative, competitive economy we are endeavouring to create. We aim to raise the quality of Dutch education so as to make our system one of the five best in the world. To this end the educational sector will on balance be spared the cutbacks imposed on other sectors, which is not to say that we won’t take any action. For example, we will institute a student loan system and replace the public transport pass entitling students to free transport with a discount card. Measures like these will free up resources in the education budget to invest in the quality of teachers and school heads, strengthen secondary vocational education and thereby invest in skilled workers for the future.

And of course, Madam President, we are fully conscious that the Netherlands is an exporting country with an open economy and a long international tradition. Our country has a positive attitude towards the EU and the wider world. That’s where we earn our money. That’s where we share responsibility for peace and security. Earlier I emphasised how vital Europe is for us. The cooperation in Europe that originated after the Second World War has greatly benefited the Netherlands and the other member states in terms of stability and prosperity. We must do everything we can to preserve these achievements. At the same time we must look to the future, making sure that European integration continues to contribute to the prosperity and wellbeing of the EU’s citizens. A stable monetary union is an essential ingredient of such integration. The Netherlands will continue to contribute to such an EU, constructively where possible and critically when necessary.

Beyond Europe’s borders, apart from the global economic crisis, the world is experiencing rapid change. The unstoppable economic rise of countries and regions in Asia and South America is creating new opportunities for Dutch companies, but also creating shortages of food, energy and raw materials and accelerating climate change. The Netherlands’ foreign policy will continue to focus on economic diplomacy, development and the promotion of human rights and the international legal order. It is true that we are reducing our development cooperation budget. But we remain among the international leaders in this regard. To enhance policy effectiveness, the government will opt in the coming years for closer links between defence, development cooperation and international trade. The new Minister for Foreign Trade and Development Cooperation will be working actively on this agenda. By joining with the business community to establish a special investment fund, the government will give form and content to our conviction that development and trade can be mutually reinforcing.

Madam President, I also want to reflect briefly on the functioning of public administration in our country. What sort of government do we want to be? First and foremost, transcending the details of specific issues, this government wants a lean, vigorous government that provides proven high quality and doesn’t hesitate to take the side of ordinary people. The first step must be to give employees in health care, education and the police enough scope to make full use of their skills on society’s behalf. This means less supervision and greater autonomy, more trust and more opportunities for professionals to move forward in their careers. We will invest in putting more police officers on the street, and will continue to pursue policies of stricter, more rapid sentencing and paying more attention to the victims of crime. Taking the side of ordinary people also means: giving housing associations less scope to take financial risks, lowering top salaries paid from public funds, and regulating banks’ role in society more strictly, including setting limits on bankers’ bonuses. In immigration and integration policy we will make clear, strict demands on newcomers, for example requiring minimum income levels and proficiency in Dutch. All admission procedures will be tightened up, but the Netherlands will continue to welcome genuine refugees. An arrangement will be made for children and young people who have been living in this country for years. In short, our immigration policy will be strict but fair, taking into account the need for public support.

Madam President, the coalition agreement includes a number of far-reaching reforms reorganising public administration in the Netherlands. Our constitutional order was established under Johan Thorbecke’s leadership in 1848 at a time when our country had a population of about three million, and was completely different in many other ways from our society today. This government believes that we would be wise to gradually adapt this order to today’s network and information society, to new financial realities and to the shifting relationships between different levels of government, including the EU.

With regard to these last two points: as we will be asking people to make heavy financial sacrifices in the next several years, it is only logical to ask every level of government to make such sacrifices as well. And it goes without saying that the central government sector will not be exempt. The appointment of a special Minister for Housing and the Central Government Sector underscores our intention in this regard. The trend towards decentralising tasks is vital for the functioning of public administration in the Netherlands. Our coalition agreement confirms and reinforces this trend: in health care, youth care and rental policy. This stems from our conviction that many public tasks should be entrusted to authorities as close as possible to the people affected by them. But from considerations of cost and efficiency and to ensure continuing high quality, these authorities must be organised on a different scale. This is why the coalition agreement presents the long-term prospect of a country made up of five regions, and municipalities with populations of at least 100,000 inhabitants in principle. This in no way denies the great importance of people’s local and regional identity and commitment, which is never dependent on organisational models. But effective, future-proof public administration demands that choices be made. In close consultation with other public authorities the government will take definite steps in this direction, for example by merging the provinces of North Holland, Utrecht and Flevoland. We will adopt the same constructive but clear attitude towards relations with the Caribbean parts of the Kingdom.

Madam President, this government is setting to work with a great sense of urgency, aware of how much we are asking of people. At the same time we are full of energy, open to the world around us, and inspired by devotion to this fine country. The coalition agreement before you today will enable the Netherlands to emerge from the crisis stronger for the future. That future demands a clear course and clear choices. It also demands a stable government that makes breakthroughs where possible and offers protection where necessary. The process cannot be painless. We fully realise that we are asking great sacrifices from everyone in the Netherlands. But a stable government that both reforms and protects is possible. And we will make it happen, provided we work together at every level in the years ahead and build new bridges – towards one another and towards the future.

Thank you.