Opinion: Forming parties also have a complicated financial puzzle to solve

The recent report from the Council of State in response to the Spring Memorandum has not made the financial puzzle on the formation table any easier. This shows that, in accordance with the new European budget rules, 22 to 23 billion euros in deficit-reducing measures must be found. For the time being, this is an indicative sum, which must be definitively submitted in June.

Europe recommends this in order to arrive at a structural balance that is sufficiently high to keep the actual deficit below the standard of 3 percent in the event of normal economic movements. This prevents additional cuts during the process and whichever cabinet takes office will have to comply with this.

The budget statement is therefore at least 5 billion more than advised by the budget space study group. And this is all without the money-consuming plans that forming parties are making. Let me limit myself to healthcare. The PVV is eager to implement its healthcare plans from the election manifesto (removal of deductible and oral care in package).

Another 8 billion

It is known that BBB supports the proposal for the deductible and NSC that it wants (monitoring of) oral care to be included in the basic package again. This alone amounts to an additional amount of 8 billion euros. The budget statement therefore amounts to 30 billion. This budgetary space must be found through both higher taxes and lower expenditures.

The crucial question is where the emphasis will be: higher taxes, or cutting back on expenditure? Although this seems to go against the spirit of the times, lower expenditure is by far preferable. Only this will provide relief to the tight labor market. The number of government jobs increased by more than 75 thousand between September 2019 and September 2023, to 599 thousand.

External staff

The hiring of external staff from government, executive organizations and municipalities is also increasing rapidly. In 2022, ministries paid 2.7 billion euros to IT professionals, consultants and interim managers. This is three times as many as in 2012. Despite the increase in personnel, the number of vacancies in public administration is still increasing. It seems that it is mainly the policy and communication departments that are expanding. In 2023, almost a thousand permanent employees worked in the communications departments. This is three hundred more than in 2015. The reason for this increase is ‘the increase in the number of ministers’.

The Spring Memorandum does not take recent agreements into account. A collective labor agreement was recently concluded for the government with a term from mid-2024 to the end of 2025. Government civil servants will receive a 10 percent pay increase and substantial one-off benefits, more than double the rate of inflation. Paid care leave will be expanded and government officials can lease a bicycle. Civil servants are also offered the opportunity to repay 2,000 euros of their student debt annually.

Euphoric

All in all, a very expensive collective labor agreement, which ensures that the task for the next cabinet will increase further. A press release states euphorically that in this way the government ‘is and remains an attractive employer, also for young starting civil servants’, but it is very easy to ignore that companies that, for example, have to realize the energy transition, are preying on the same ICT engineers, planners and technicians.

A new cabinet must therefore put limits on the expansion of the number of civil servants and must simply maintain the so-called Roemer standard – the agreement that the share of external hires may not exceed 10 percent of the personnel budget.

Social Security

Furthermore, expenditure on health care and social security will have to be examined critically. These have increased from 156 billion in 2019 to 216 billion euros in 2024, substantially faster than the growth of the economy. Reversing this trend requires maintaining or even increasing the deductible in healthcare, an income-related contribution for Wmo and youth care, and decoupling the AOW from (minimum) wage development.

Finally, it is recommended, as also included in the NSC election programme, to arrive at a ‘comprehensive spending reviewof collective expenditure. For example, the wealth of learning and development schemes needs to be critically examined. The National Education Program (NPO) created a tsunami of resources that often ended up at substandard tutoring agencies, because schools were unable to allocate these budgets properly. Such a review helps politicians set priorities and answer the question of what services we want from the government and for whom.