How to raise €35bn: make cuts, put up taxes

Increasing the own risk element in health insurance to €775, cutting the minimum wage by 10% and reducing basic welfare benefits – these are just some of the ways the government can get its spending under control, according to civil service recommendations made on Thursday.


The recommendations are the work of 20 government working parties, set up to indentify ways of boosting the government coffers by a structural €35bn. The Dutch budget deficit is set to reach 6% this year.
The working parties were set up last year, before the cabinet collapsed, to suggest spending cuts and tax increases which would effectively amount to a 20% reduction in ministerial budgets.
General election
The groups were asked to speed up their work, so the suggestions can be included in political party manifestos ahead of the June 9 general election.
The proposals range from bringing in extra charges for rush-hour travel, slashing civil service numbers and bringing in a €5 fee for visits to the family doctor.
Unions have already condemned some of the suggestions, saying they will increase divisions between rich and poor.
Drastic action
Prime minister Jan Peter Balkenende said the new government will not be able to avoid drastic action.
The 20 reports offer ‘very great insight’ into the options to make savings, the prime minister told reporters. ‘It is now up to political parties to state what they will or will not do.’
The current cabinet is not able to take any action because it is in a caretaker role.
Each of the recommendations has a price tag attached, allowing parties to pick and choose the various elements.
What do you think of the proposals? Take part in our poll
Housing market:

  • Increase rents in popular areas and for high earners living in rent-controlled housing
  • Cut mortgage tax relief to a maximum €500,000 and limit tax break to 42% tax band
  • Unemployment, benefits and work

  • Cut unemployment benefit entitlement to one year
  • Reduce level of unemployment benefits
  • Merge various disability benefit systems in one unifying benefit
  • End link between benefits and inflation
  • Reduce government childcare contributions
  • Reduce minimum wage by 10%
  • Public sector

  • Slash provincial government and water board staffing from 13,000 to 1,650
  • Reduce the number of provincial governments from 12 to between five and eight
  • Reduce defence ministry staff by 23,000 and reduce support for international missions
  • Schools

  • Increase productivity, focusing on improving primary school education
  • Reduce spending on special education
  • Increase parental fees for school books
  • Increase primary school class sizes – recognising this will hurt standards
  • Reduce teaching hours in secondary schools
  • Higher education

  • Replace student grant system with loans
  • Double student fees for universities and colleges
  • Boost productivity and efficiency
  • Medical and residential care

  • Increase own-risk element in health insurance to up to €775
  • Reduce basic insurance package provisions
  • Introduce €5 charge for family doctor visits
  • Boost competition between healthcare providers
  • Reform ABWZ residential care system by giving patients an individual budget, shifting responsibility to local councils or health insurance companies
  • Increase fees for residential care homes
  • Stop paying for care for the mentally-handicapped with an IQ of over 70
  • Mobility, water

  • Introduction of peak period surcharge for motorists and public transport users
  • Increase public transport ticket prices 10% to pay for maintenance
  • Introduce kilometre tax for lorries
  • Scrap road building projects
  • Energy and climate

  • Scrap subsidy system and increase energy taxes
  • Force home owners of older buildings to improve insulation
  • Development aid and diplomacy

  • Reduce subsidies to independent aid organisations
  • Reduce number of countries which get aid
  • Close embassies and consulates
  • Immigration, integration

  • Reduce length of asylum procedure
  • Make immigrants pay for integration courses
  • Law and order

  • Merge the 26 separate police forces into one body
  • Increase fines
  • Merge some justice and home affairs ministry departments
  • Make event organisers pay for policing
  • Privatise some jails and the fire brigade
  • Legalise soft drugs trade (generating tax income)
  • (Sources, Financieele Dagblad, Telegraaf and Volkskrant)

    Thank you for donating to DutchNews.nl.

    We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.

    Make a donation