Speech from the Throne 200915 september 2009
The Hague, 15 September 2009
Members of the States General,
The times we are living in demand determination and a willingness to change. The global financial and economic crisis has hit countries hard, including the Netherlands. The speed at which events unfolded over the past year was unprecedented. People are losing their jobs, the number of bankruptcies is rising fast, assets built up over many years are shrinking and public finances are inevitably showing large deficits. The consequences will be felt for a long time to come. In addition, aberrations in the financial sector have undermined trust in institutions and their directors. As a result, many people are feeling increasingly uncertain about the future.
The government's ambition is to turn uncertainty into recovery. The changes required can strengthen the Netherlands economically and socially. We have much to offer our country and one another by standing together and holding fast to the tradition of freedom, responsible citizenship and active European and international engagement.
In the autumn of 2008 the government vigorously intervened in the financial sector in order to safeguard people's savings and business finance, and prevent economic collapse.
€3 billion is to be invested in building and maintaining schools, hospitals, homes and infrastructure, and energy conservation. With these measures, the government aims to stimulate the economy. Another €3 billion has been set aside for labour market and business, and education and knowledge. Companies are being supported with broader loan facilities and part-time unemployment schemes. This will enable more employees to keep their jobs.
Between 2008 and 2011 an extra €8 billion will be spent on unemployment and social assistance benefits. The budget for 2010 devotes special attention to fighting youth unemployment.
Today, the government is submitting a Crisis and Recovery Bill, aimed at accelerating procedures for infrastructure projects. This will lay the basis for greater economic dynamism and therefore more jobs.
Government spending will not be cut while the Dutch economy is shrinking. These and other measures will cushion the impact of the recession as much as possible in the short term. For subsequent years, the present budget contains proposals that provide a basis for restoring public finances.
The national debt has risen sharply and will not fall again by itself. The surplus of 1% of GDP on last year's budget will have turned into a deficit of over 6% in 2010. The recession is resulting in considerably lower tax revenue from private individuals and businesses. Even with an average economic growth of 2%, the national debt will continue to increase by about €35 billion a year.
Although the economy looks set to improve slightly next year, the tasks we face are still considerable. Declining prosperity and a mounting national debt will make it more difficult to meet the costs of an ageing population and make the necessary transition to an economy that fully satisfies the demands imposed by a sound climate and environmental policy. If policy remains unchanged, there will be serious and undesirable consequences for the level of taxes and social insurance contributions, employment and the affordability of pensions and services such as health care and education.
The government believes it would be inappropriate to pass on these bills to the younger generation and future generations. Young people today face the prospect of being unable to find jobs, of having to bear the additional costs of an older population during their working lives, and of then being unable to rely on good public services. We must not allow this to happen!
Against this backdrop, the government has already presented its plans to raise the state pension age to 67 (making allowances for strenuous occupations), curb healthcare costs and tax owners of homes worth over €1 million more heavily.
Before the end of this year, a Central and Local Government Deficit Reduction Bill will be submitted to parliament, which the government hopes will take effect on 1 January 2011. This legislation will make it compulsory to improve the balance between expenditure and revenue each year.
Over the next six months, the government will prepare fundamental reviews of some 20 broad areas of the public sector. The 2010 Spring Memorandum will provide the first opportunity to announce measures. To help restore public finances, areas will be sought in which social objectives can be achieved while cutting spending by 20%. The aim is to identify financially viable ways to perform public services more effectively, better tailor policy to problems in society and achieve a better division of responsibilities between government and citizens.
The reviews must also result in education, knowledge, innovation and enterprise being used more effectively to promote economic growth. They will also show how important sectors of the Dutch business community, such as water management and energy, agriculture and fisheries, climate and environment, can contribute. The reviews are aimed at making fundamental choices in order to strengthen our country's economy and society.
Wage restraint helps to create more jobs and to divide the costs of the economic recession fairly between those in work and those out of work, between the public and private sectors, between people with higher and lower incomes, and between young and old. The government calls on the social partners to avoid inappropriate pay rises. If this does not happen, the government will have to take further measures.
The economic recession has exposed ethical shortcomings in the way market and society operate. The government has identified flaws in the financial sector both inside and outside the Netherlands, and drawn up proposals for stricter standards and better supervision. Binding agreements will be made on limiting excessive salaries and bonuses.
In these difficult times, the government believes it is important to continue working towards a society in which people feel a sense of togetherness, respect one another and share responsibility. A good upbringing and good education are the foundation of responsible citizenship.
Over the past two years, the government has taken measures to promote social cohesion, safety and security, stability and mutual respect. A persistent, multi-year approach is required to achieve results. The government will therefore continue to devote special attention to youth and young people, civic integration and vulnerable neighbourhoods in the big cities.
The lack of integration of certain groups in society, widespread disrespectful and offensive behaviour in public places and criminal behaviour by groups of young people are stubborn problems that cause a great deal of annoyance. The government is therefore not only taking consistent action against offenders but also tackling the causes of unacceptable behaviour. To this end, it is imperative for the criminal justice authorities, police, municipalities, probation services and youth care services to work together.
The government will promote social resilience in the Netherlands by giving citizens and organisations more space and working closely with them. Close cooperation is also needed with local authorities and the public sector. Confidence in civil society organisations, democracy and the rule of law are indispensable in this regard.
For the Netherlands to be economically and socially strong, it needs to work with its European partners and pursue an international approach. It has much to gain from an open and sustainable world economy. Over 60% of our jobs directly depend on this. The Netherlands is committed to free and fair world trade and better supervision of the international financial sector.
The recession is making it more difficult to fight poverty and tackle climate change - tasks that all countries face. Nevertheless, the Netherlands will continue to press for cooperation with the poorest countries and with countries with emerging economies, and for drastic cuts in the emission of harmful substances. The General Assembly of the United Nations, the G20 summit in Pittsburgh and the climate conference in Copenhagen all offer the chance to take further steps this year.
The Netherlands has a great deal to offer the world. We want to promote peace and security. Our country champions human rights, freedom, democracy and the international legal order. These values originated in Europe. European cooperation remains essential, especially at times like this. The government looks forward to the Lisbon Treaty entering into force.
The Netherlands will continue to fulfil its international responsibilities and participate in peace and security missions. The government has great admiration for the troops that carry out these difficult tasks, such as in Afghanistan. We remember and respect all those who have lost their lives or been injured on these missions.
The government will continue to work towards healthy public finances and good public services in its relations with other parts of the Kingdom. New constitutional arrangements within the Kingdom should contribute to these goals. All those involved should try to finalise the arrangements over the coming year, in the public interest.
Members of the States General,
The Netherlands faces an exceptional but by no means impossible task. With determination and a willingness to change we can use the opportunities that present themselves to strengthen our country economically and socially. The government calls on all Dutch citizens and everyone living in the Netherlands to play their part. All of us have a responsibility, young and old, members of the public and administrators, employees and employers. The government hopes that everyone realises this and will act accordingly.
You, members of the States General, bear a heavy responsibility. You need to take the initiative, together with the government. In discharging your duties, you may feel supported in the knowledge that many are wishing you wisdom and join me in praying for strength and God's blessing upon you.
Tuesday 15 September 2009