2017 Budget Memorandum: the Netherlands is in much better shape
Public finances have improved and the economy is forecast to grow by 1.7% in 2017. Consumer confidence is strengthening and businesses are investing again. After a series of difficult years, the Netherlands is in better shape and public services will remain affordable for future generations. 'The tide has turned,' said finance minister Jeroen Dijsselbloem when he presented the Budget Memorandum for 2017. 'We are back on solid ground. And we can again look further ahead and invest in opportunities for people.'
Further improvement in public finances
The budget deficit rose to over 5% of gross domestic product (GDP) at the height of the crisis but is projected to fall to 0.5% next year. National debt will decline further to 62% of GDP next year. Structural measures taken by the government, such as increasing the state pension age and interventions in the care sector, will ensure that education, healthcare, social security and other public services remain affordable.
|as % of GDP||4,3||3,9||2,4||2,3||1,9||1,1||0,5|
|in billions of €||28||25||15||15||13||8||3|
|deficit per day (€ million)||76||68||42||41||35||21||9|
|as % of GDP||62||66||68||68||65||63||62|
|in billions of €||396||428||442||450||441||439||440|
|per Dutch citizen (€)||24,000||26,000||26,000||27,000||26,000||26,000||26,000|
Purchasing power and investments in 2017
Public finances are in better shape than foreseen when the government took office in 2012. It will therefore be possible to spend € 1.1 billion every year from 2017 to strengthen purchasing power. All groups – people in work, benefit recipients and pensioners – will benefit from the improved economic conditions. In addition, € 1.5 billion will be invested in security, education and healthcare.
In response to terrorist attacks and armed conflicts, the government will invest an extra € 450 million in security, with over € 200 million being spent on the national police force. The defence budget will be raised by € 300 million, with over € 200 million for the armed forces. To combat inequality, € 100 million will be invested on a structural basis to combat child poverty. The government will invest in, for example, sports, school equipment and swimming lessons so that all children can take part. Funds will also be provided to improve equality of opportunity and facilitate progression to further and higher education. The government will also scrap the planned spending cuts in chronic care.
The government wants to introduce measures during the remainder of its term to encourage investments in the Netherlands. It is seeking to facilitate industry and address societal challenges such as energy transition, sustainability, infrastructure and education.
The government intends to align public and private sector investment opportunities more closely and to make more efficient use of facilities for business. This will require a shift from providing grants to supporting finance. Most European countries are encouraging investments through a national investment bank that combines financial instruments and meets new financing needs quickly and effectively.