The outgoing government lacks a structural vision on how to budget to meet future challenges. This is what the Council of State says Tips on the 2024 budget memorandum.
According to the Council, these challenges in the coming years are great. The outgoing government must “use the coming year” to determine the difficult choices to be made in the area of income and climate policy.
For example, the government is now coming up with an approach to fighting poverty, but according to State Counselor Richard van Zoll, the long-term analysis is missing: “Are we now going to combat the increase in poverty for 25 years with short-term measures? The term purchasing power measures?”
According to him, the government should consider the question of why ordinary people cannot earn an ordinary sandwich.
Fellow state councilor Frank de Greiff said: “If you have to come up with a purchasing power package for the poor and there are concerns about middle incomes, you can expect more coherence between the tax plan and the budget rules.” He now thinks it sounds too “snarky” and particularly lacking in a “cohesive story”.
In the climate field, according to the State Council, there is a lack of vision on “climate-related tax measures.” It is not clear how much climate problems will cost in the coming years, but it is not clear, however, where the money to address the problems will come from.
According to the Council, climate change is one of the biggest social challenges in the coming years. This will lead to a structural change in government finances.
For this reason, costs should also be given a more structural place in analyzes of the sustainability of budgets, according to the Council(d).
The government has announced the allocation of funds for climate measures, although the laws for this have not yet been adopted by both chambers. This makes it unclear what the impact will be on fiscal sustainability.
The Netherlands will not be in the danger zone with its budget deficit before 2023 and 2024, but from 2025 it will no longer comply with European rules. The rate of economic growth can also be disappointing.
If so, the new government will have to come up with reforms. These reforms will not produce results overnight. The State Council believes it is now wise to focus on more structural options.
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