Speech by the Minister of Finance on the 2027 Budget Memorandum

Mr President,

Today I present to you the 2027 Budget Memorandum.

Working on this budget was a lengthy process.
Involving discussion with many parties.

A budget that was not set in stone.

Unlike my character,
judging by newspaper commentaries in recent weeks.

[laughter]

But it is a budget whose purpose concerns us all.

Because the world around us is changing rapidly.
Our security is under pressure.
And our future prosperity no longer seems as self-evident as it once was.

That demands a budget that sets out a shared direction.

In the Netherlands we’ve often shown that we can cope with big changes if we unite around a common purpose.

We won’t do this by glossing over differences, but by recognising that some challenges are more important than everyone getting their own way.

At this juncture, we need a shared objective again.
An objective that looks beyond the next budget.
Whether we’re talking about our security, our public services, or the opportunities we want to give future generations.

They all depend on the strength of our economy.

And this is precisely where we are losing strength.

International competition is becoming fiercer.
Our productivity is barely growing.
And investment is lagging.

So our country must commit to the task of generating economic growth.
Because it’s in everyone’s interests for the country to be moving forward.
After all, it’s about having work. A good income.
Education for your children.
And healthcare you can depend on.

A country that is strong enough to defend itself.

That means we have to invest, reform, and step up international cooperation, so that we become stronger.

First, investment.

Sound public finances are a prerequisite.
And there are no easy solutions here.

You can’t just rewrite the fiscal rules.
Pretend that the accounts don’t exist.
Or shy away from difficult decisions.

However you look at it, you can only spend each euro once.
Rising debt levels and interest costs limit the scope for investment.
Regulatory pressure, delays in granting permits and grid congestion are holding investment back at present.

That puts a brake on our economy.

We need to release that brake.
Sometimes that means you have to let go of old ideas.
That applies to me too.
As you know, I’m a firm believer in market forces.

But if the market falls short, and promising entrepreneurs are held back and unable to grow as a result, you have to be prepared to modify your thinking to reflect reality.
That’s why I also recognise the importance of establishing a National Investment Institution.
Focusing on promising businesses that want to grow but are unable to raise the money to do so.
So that businesses that start up here can also continue to grow here. And stay here.

In addition, we have to make investment attractive through taxation.
So the government will soon be presenting a broadly supported, definitive proposal to work towards a capital gains tax for income on savings and investments (box 3).

All these choices are designed to achieve the same goal: to make the Netherlands the best place for investment and growth.

Besides investing, we also need to reform.

Because while investment is lagging,
many other items of expenditure keep growing.

Without reforms in social security and healthcare, expenditure today will reduce our scope for action tomorrow.

So we have to make choices.

Not just to cut back on good public services, but to keep them affordable and accessible.

The Netherlands has got stuck on several fronts.
People who want to contribute more are getting needlessly bogged down by regulations.
Businesses that want to grow are getting bogged down by rules and obligations.

With reforms we often focus too much on what we risk losing, and too little on what we are getting in return.
Namely more scope for growth.

And our country’s commitment to economic growth does not stop at the border.
The world we know is undergoing rapid and fundamental change.
For decades we could count on free trade, international rules and allies working together to protect our security.

Those assumptions now belong to the past.
Economic dependencies are being weaponised.
Major powers are increasingly deciding for themselves what rules apply to them.

The Netherlands cannot confront these challenges alone.
And many other European countries have come to the same realisation.
This is indeed the very basis of European cooperation.

My own ideas about Europe have also evolved during my time in office.

I’m still critical when Europe claims more power than is necessary.
Or continues to incur more debts.
But I’ve also learned that working together sometimes increases our influence.
To give our businesses more scope to grow.
To protect our security.
And to strengthen Europe’s position in the world.

That’s why we have to pursue deeper European cooperation.
Improve the functioning of our single market.
And strengthen economic ties with countries outside Europe.

The world of yesterday is not coming back.
Our task is therefore to determine what the world of tomorrow will look like.

Mr President,

Economic growth requires political cooperation.
This is reflected in this Budget Memorandum.
We have sought scope to incorporate the proposals of opposition parties.

A wish expressed by many was to ease the higher tax burden arising from the freedom contribution and to give working people on middle incomes more breathing space.

We are acting on that wish with this package of purchasing-power measures.
We are also extending the lower rates of excise duties on petrol and diesel, and flight tax will be reduced, in combination with measures to make aviation more sustainable.

We will invest more in what the Netherlands needs for growth.
In infrastructure. In housing construction. And in our energy independence.
And we will seek broad political and public support for reforms.

Employers and employees will be given scope to devise alternative reforms.
That is why we are amending or postponing a number of measures.
So that we can finally get round the table together to work on solutions that make the Netherlands stronger.
We have also been able to accommodate other wishes expressed in the House.
To support vulnerable families for example.
To improve palliative care and children’s safety.
To expand vaccination and to prevent femicide.
These are choices that have to be funded.

We will do this by spending less.
As a result, the budget deficit will get smaller.
And we will make targeted tax cuts.
Without passing on the bill to future generations.

Mr President,
Big changes begin with an objective that is important enough to overcome differences.
That means our country must commit to the task of generating economic growth.
To this end, we will need to build a coalition for growth in the Netherlands and Europe.
A coalition of parties and countries that look ahead, take responsibility and have the courage to make tough choices.

For our future prosperity.
For our security and our freedom.

In this Budget Memorandum, the government has shown what choices this entails:
by investing, reforming and seeking to work together.

But the scope of this endeavour exceeds one budget.

The real work starts now.
The direction to be followed is clear:
Safeguarding our prosperity with a renewed drive for growth.

Mr President, I present to you the 2027 Budget Memorandum.