Budget Memorandum 2023

Speech by the Minister of Finance, Sigrid Kaag, on the occasion of the presentation of the 2024 Budget Memorandum, 19 September 2023.

Madam President,

The Freedom to be Free. That is the title of a famous essay by the political philosopher Hannah Arendt.

There are many ways to interpret the concept of freedom. Revolutions have been fought to obtain the freedom we are exercising here today: the freedom to stand up in parliament, arguing for the values that we stand for and the course we believe our country should take. Freedom can be brutally crushed. Take the Ukrainian people, whose freedom has been curtailed in an appalling way for far too long already. That is a most literal and gross violation of freedom. But for Arendt, the ‘freedom to be free’ means not only freedom from fear, but also freedom from poverty and want.

To move freely in the world, she argues, freedom from fear and from poverty are essential. The basic principles of existence must be in order before we have the freedom – and feel we have the freedom – to participate in public life.

For many people in the Netherlands, the past year has not been easy. They did not feel free, because high inflation and soaring energy prices made it very hard to make ends meet. The Netherlands Bureau for Economic Policy Analysis recently calculated that, without government intervention, the number of adults and children living in poverty would rise further.

This is unacceptable, and that is why the government is taking measures to protect the purchasing power of vulnerable households. This will reduce the number of children growing up in poverty. To this end, the government is making an extra two billion euros available every year. And by fully funding this package of measures so it will not increase the budget deficit, we can ensure that future generations will not end up paying the bill.

People impacted by the failings in the childcare benefit system and those living in the earthquake zone in Groningen are entitled to be free from worry about money or safety. The people of Ukraine are entitled to have peace, security and freedom again, and no longer to be the victims of a foreign aggressor. The government and the House are united in emphasising the importance of continuing our efforts to achieve these outcomes.

We do so in a turbulent time, yet one in which our economy and society are proving strong and resilient. The COVID pandemic and Russia’s continuing aggression against Ukraine have had a major impact on our society and on our sense of security. The ensuing rise in prices for groceries and energy have been felt by virtually everyone. Fortunately, the price ceiling and purchasing power measures imposed by the government have had the desired effect.

The high prices are still forcing people to tighten their belts, but we have succeeded in preventing half a million people being unable to pay their bills.

In addition, there are currently more Dutch people in work than ever before. That is good news for the country as a whole, and for each individual concerned.

Our economy recovered faster from the pandemic than other European countries, and grew rapidly. Despite a slight contraction in the first two quarters of this year, continued growth is predicted for 2023 as a whole, and for the following year. Our economy is, and will continue to be, one of the most competitive and innovative in the world. Together we are developing new, sustainable technologies at lightning speed. At times we almost forget that we live in a ‘high-trust’ society, in which people’s trust in each other is growing.

In order to keep our economy healthy and safeguard future prosperity, we must ensure the public finances remain sound. We cannot simply pass on the bill to future generations.

Referring to the next generations – to our children and grandchildren – the Lebanese writer and poet Khalil Gibran wrote, ‘Their souls dwell in the house of tomorrow, which you cannot visit, not even in your dreams.’

The future – ‘the house of tomorrow’ – cannot be visited. And so for us it is often impossible to imagine. It is easy to forget, or to ignore. Especially if we are consumed by today’s urgent problems. And yet, we cannot allow such problems to rob us of the dream of a promising future for the generations that come after us.

Because the challenges facing our ‘house of tomorrow’ are significant. They involve not only keeping our finances in order but also maintaining education and healthcare systems that are under increasing pressure due to a tight labour market and a steadily ageing population. They involve the energy transition. This cannot wait now that climate change is banging on our door.

The planet is heating up faster than expected, and the effects can be seen and felt everywhere. We can only fix the climate crisis if all countries, including the Netherlands, are part of the solution.

I hope, for the sake of future generations, that the House – and in due course a new government – will do everything possible to support and accelerate the climate transition, including by phasing out fossil-fuel subsidies. Because, in the end, doing nothing will cost far more than pursuing ambitious climate policy.

Lastly, the war in Ukraine has reminded us all that security on our continent cannot be taken for granted. That we can only protect our continent by working with our NATO Allies and staying deeply rooted in a strong European Union. The future of the Netherlands is European.

The challenges we must meet in order to build a strong ‘house of tomorrow’ are about more than the economy and material wealth alone. Our budget is geared to wellbeing in its broadest sense. That means promoting not only a strong economy, but also a flourishing natural environment, high-quality education and equal opportunities. Not only for today, but also for tomorrow. Not only here in the Netherlands, but also elsewhere in the world.

Madam President,

Today I stand before you as Minister of Finance of the fourth Rutte government, in its caretaker capacity. It is most likely the last Budget Memorandum I will have the privilege to present to you. I very much hope that the House will be able to debate much of the budget before the end of the year.

Members of parliament and we as members of the government share an immense responsibility. This is the forum in which we can change things for the better. Where we can build a better Netherlands. For the remainder of its term, I wish the House inspiration, wisdom and respectful collaboration. It is hereby my pleasure to present to you the 2024 Budget Memorandum.

Thank you.