2016 annual financial report: first budget surplus in years
Last year central government spent less money than it received for the first time since 2008. This led to a budget surplus of €2.9 billion. The main reason was that taxes and social insurance contributions generated more revenue than expected. Spending was also slightly lower than budgeted for. In addition, the government debt fell substantially.
This can be seen in the central government annual financial report for last year, which sets out and accounts for economic and fiscal developments in 2016. Today, Minister of Finance Jeroen Dijsselbloem officially presented the annual financial report and all the other accountability documents to the House of Representatives and the Senate. The House of Representatives will debate them on 31 May 2017.
In 2016 the Dutch economy grew by 2.2% – the highest growth rate since the financial crisis broke out in 2008. The government debt at the end of 2016 was €434 billion, or 62.3% of gross domestic product (GDP). That is €32 billion lower than the government expected in the 2016 Budget Memorandum.
| Deficit / surplus | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 |
|---|---|---|---|---|---|---|---|
| as % of GDP | -5.0 | -4.3 | -3.9 | -2.4 | -2.3 | -2.1 | 0.4 |
| in billions of euros | -31.5 | -27.6 | -25.1 | -15.5 | -15.0 | -14.1 | 2.9 |
| amount per day (in millions of euros) | -86 | -76 | -68 | -42 | -41 | -39 | 8 |
| Government debt | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 |
|---|---|---|---|---|---|---|---|
| as % of GDP | 59.3 | 61.6 | 66.4 | 67.7 | 67.9 | 65.2 | 62.3 |
| in billions of euros | 375 | 396 | 428 | 442 | 450 | 441 | 434 |
| amount per capita (in euros) | 23,000 | 24,000 | 26,000 | 26,000 | 27,000 | 26,000 | 26,000 |
| Date | Budget Memorandum 2016 (Sept. 2015) | Spring Memorandum 2016 (May 2016) | Budget Memorandum 2017 (Sept. 2016) | Autumn Memorandum 2016 (Nov. 2016) | Annual report 2016 (May 2017) |
|---|---|---|---|---|---|
| Budget deficit (EMU balance, % GDP) | -1.5 | -1.4 | -1.1 | -0.4 | 0.4 |
| Government debt (EMU debt, % GDP) | 66.2 | 64.4 | 63.4 | 63.0 | 62.3 |
Labour and housing markets
Last year also saw improvements in the labour and housing markets. Unemployment fell sharply by 75,000 and stood at 5.4% of the workforce in December – the lowest level since the end of 2011. Long-term unemployment, including among the elderly, also fell, for the first time since 2009. The number of people in work increased by about 110,000.
Home sales reached record levels. The number of homeowners in negative equity, i.e. with mortgages higher than the value of their homes, continued to fall in 2016. At the end of 2015, 25.6% of homeowners were in negative equity, while at the end of 2016 the figure was 17.6%.
Operations
In 2016 central government revenues and expenditures were again highly regular and exceeded the 99% norm. But not everything went well in 2016. For instance, the financial decision-making of the Tax and Customs Administration was placed under enhanced supervision. The organisation is in the midst of a lengthy and extensive reorganisation. In addition, the Ministry of Finance took steps to improve the financial supervision of the Tax and Customs Administration.
Financial sector
In 2016, after being entirely state owned for eight years, an initial part of insurance company ASR was floated on the stock exchange. The sale of over 36% of its shares raised €1.1 billion. In addition, the state sold a second tranche of its holding in ABN AMRO. This involved 7% of the outstanding share capital and generated over €1.3 billion. Last year, Propertize, the former real estate division of SNS Reaal, was sold to a consortium consisting of Lone Star Funds and JPMorgan. The sale generated nearly €0.9 billion.