Spring Memorandum 2011: Considerable setbacks do not lead to additional expenditure
07.07.2011
In spite of large financial setbacks, in particular in healthcare, the Cabinet has succeeded in not letting increase the total expenditure in 2011.
In addition, the situation of public finance is somewhat better than expected, but as a result of the substantial uncertainties and risks the Minister of Finance, Jan Kees de Jager, warns against too much optimism. This is apparent from the Spring Memorandum 2011 that was sent to the Lower House of Parliament today.
In spite of large financial setbacks, in particular in healthcare, the Cabinet has succeeded in not letting increase the total expenditure in 2011. In addition, the situation of public finance is somewhat better than expected, but as a result of the substantial uncertainties and risks the Minister of Finance, Jan Kees de Jager, warns against too much optimism.
The budget deficit and the debt are developing more advantageously than expected. Still, it is too early to draw conclusions from this fact as yet, says Minister De Jager. “We are not out of the woods yet. Public finance will not be in order for a long time to come, and in view of the budding recovery of the economy, the ageing population and the risks of the European debt crisis, we should be extra careful. Moreover, the Netherlands does not yet comply with the European standards, not even with these new, better figures.”
The Spring Memorandum reports an expected budget deficit of 3.6 percent of the Gross Domestic Product (GDP) for 2011: a 0.4 percent improvement compared to the Coalition Agreement. This re-adjustment is in particular the result of the economy picking up, which results in higher gas revenues and tax revenues and a decreased expenditure on interest and unemployment benefits. The EMU debt decreases from 66 percent of the GDP to 64 percent. This is for a major part the result of the repayments made by ING and Aegon.
The budgetary year 2011 is characterised by considerable setbacks. The over-expenditure mainly occurs in healthcare (primary care, exceptional medical expenses and mental healthcare), but the budget is not sufficient for childcare allowance and the invalidity benefit schemes, either. On the other hand, there are some windfalls as well, such as the lower unemployment expenditure. In addition, at the end of last year payments were made for 2011, so that there is a balanced total framework for the current budgetary year.
It is not possible to take measures with regard to the higher healthcare expenditure that will have an effect in 2011. Measures will be taken for healthcare setbacks in the years 2012 and further, parts of which measures will be submitted to the Lower House before the summer recess. The other measures will be announced in the Budget Memorandum 2012.
The Budget Memorandum gives a list of the changes in the budget compared to the Initial Policy Document of the present Cabinet. These amendments are based on new macro-economic forecasts of the Netherlands Bureau for Economic Policy Analysis (CPB) and views regarding the budget outturn account.
