Speech from the Throne 2012

18 september 2012

The Hague, 18 September 2012

Members of the States General,

The budget that the government is presenting to you today relates to a special anniversary year in our country's history. National celebrations of the Kingdom's bicentenary will begin in 2013. After an extremely turbulent period in our own country and everywhere else in Europe, the foundations for a new polity were laid in 1813. Prince Willem Frederik, who later became King Willem I, issued a proclamation on his arrival in Scheveningen. In it, he spoke not only about the freedom that had been regained, but also about the great importance of restoring trade and prosperity. The dignitaries who shortly afterwards offered him the sovereignty of the country emphasised the resilience that was then being demanded of society as a whole.

Two centuries later, in a very different social and constitutional context, our country is once again facing a challenge that calls for great resilience. The financial and economic crisis that has gripped the world since 2008 is also seriously affecting the Netherlands. Economic recovery will not come about of its own accord.

The opening of this parliamentary year is taking place at a time when a new government is being formed. Given its caretaker status, it is incumbent on the present government to exercise restraint in making new proposals. At the same time, tackling the urgent problems facing our country and the rest of Europe brooks no delay.

Throughout the world, economic growth is lagging behind expectations. Partly due to the debt crisis in some eurozone countries, the economic crisis is deeper and more persistent than anticipated. The Netherlands, with its open and internationally oriented economy, is being hit particularly hard. Large and small businesses are suffering the consequences. Unemployment in our country is still relatively low compared with other countries, but here, too, it is on the rise. A particular cause for concern is that young people are unable to find work on completing their education.

In the present circumstances, people are understandably worried about their jobs, their pensions, the value of their homes and the future of their children. The government recognises that everyone in the Netherlands will have to make big sacrifices if we are to restore health to public finances and secure our future prosperity. Even when the economy and consumer confidence pick up again, future growth figures are likely to be lower than we were used to in the recent past. At the same time, we live in one of the wealthiest countries in the world, with a high standard of public services. It is good to bear this in mind as we continue to work together, energetically and confidently, towards recovery.

Government policy is focused on sustainable public finances, and also on promoting enterprise, investing in infrastructure, improving public safety and security, and strengthening education and innovation. Far-reaching changes have been introduced in several areas, such as the creation of a national police force as of 1 January 2013. In education, measures are being taken to improve quality and make it more attractive for young people to opt for vocational training. In the care sector, significant steps have been taken to enhance quality and contain costs. The government has made agreements on this matter with hospitals, mental healthcare institutions, medical specialists and family doctors. The operational management of central government is being made more efficient through better cooperation in areas such as information and communications technology, accommodation, and personnel policy.

When it took office in 2010, the government presented a package of proposed cutbacks and reforms worth €18 billion. In early 2012, further bold measures proved necessary to keep the budget deficit under control in 2013. The government is pleased that, this spring, five parties reached a budget agreement that reflects the gravity and scale of the financial and economic problems facing our country. Thanks to this agreement, the government can continue to promote financial solidity and make growth-oriented reforms in 2013. As a result, the deficit will fall below the 3% norm next year. This will boost the confidence of the financial markets in our country and keep interest charges in check.

From 1 January, the state pension age will gradually be increased, reaching 67 in 2023. Increasing the top VAT rate on 1 October and freezing the salaries of public servants will directly contribute to reducing the budget deficit. The tax on banks will be doubled and excessive bonuses will be heavily taxed. Changes to unemployment benefit and legislation on the termination of employment will make the labour market more flexible. On the housing market, transfer tax has been reduced. The budget that the government is presenting today also contains a proposal on mortgage debt repayment.

In Europe significant moves have been made to promote the stability of the single currency and ensure a stronger euro in the future. The European Union can contribute greatly to future growth in prosperity, well-being and employment for residents of all member states. European cooperation, which has brought our country so much, has been put under pressure by the debt crisis. A well-functioning internal market and a strong and stable currency are of vital economic importance for all member states. They are essential for the Netherlands, which earns a large portion of its national income in Europe. That is why the government attaches great importance to making lasting improvements to the single currency and the internal market.

In these areas, the Netherlands made proposals that were taken up by other countries. As a result, a two-pronged approach was adopted involving strict budget discipline and strengthening the European growth agenda. A European Commissioner has been given special responsibility for budget discipline, and automatic sanctions will be imposed more quickly on countries that break the rules. All member states must abide by them. Countries will hold one another to account to ensure the introduction of the domestic reforms necessary for economic growth. Other concrete results include cheaper mobile data traffic and the creation of a fast and affordable European patent protection system. The latter is very important for innovative Dutch companies.

The major issues involved in reducing the national debt, the future of the euro and the affordability of health care, good education and an equitable system of social provision cannot be solved overnight. Few people in our country dispute the need to put public finances on a healthy footing and then keep them under control. Many people share the ideal of social solidarity and wish to play their part. The government believes that this provides a sound basis for a joint approach that enjoys broad support. The involvement of trade unions, employer organisations and other civil society players is essential. The same applies to provinces, municipalities and water authorities. After all, local and regional authorities, too, are being asked to control their finances at a time when their role and tasks are expanding.

In the Caribbean part of the Kingdom, relatively small countries are facing serious challenges. There, too, the economic crisis is making itself felt. The new constitutional structures are still young. Transparency and sustainable public finances are very important for the population and its confidence in the authorities. Since the constitutional reforms of October 2010, the islands of Bonaire, St Eustatius and Saba have been investing in improvements in various fields, including hospital care, the quality of school buildings and teachers, and wastewater treatment.

Working with other countries has traditionally been a key feature of Dutch foreign policy. Its importance is increasing on all fronts at this time of growing international connections. Economic diplomacy is now more necessary than ever in order to overcome the crisis. Joint action is also required to improve respect for human rights, reduce poverty and tackle climate change and environmental problems. The Netherlands plays a leading role in the international coalition against piracy, not least to protect our own merchant navy.

In the field of development cooperation, the government opts for a policy in which strengthening the economic structure and increasing self-reliance are mutually reinforcing. That is why its approach focuses on working with a smaller number of partner countries, especially on issues where our country has a great deal of experience and expertise, such as water management, agriculture and strengthening the rule of law. This allows more concrete results to be achieved for all partners concerned.

In the field of peace and security, it remains imperative for the international community to oppose injustice and insecurity. The dramatic events in Syria underline this once again. In Afghanistan and elsewhere over a thousand Dutch men and women are working day in, day out to promote legal certainty and human dignity. They deserve our deep respect.

Members of the States General,

Socially and economically, the Netherlands is a strong country, built on a long tradition of international entrepreneurship, hard work and solidarity between population groups and the generations. At decisive moments in our history, the Netherlands has shown the sort of resilience that was talked about as long ago as the origins of the Kingdom in 1813. Past generations have shown under difficult circumstances that they can bridge differences through close consultations in the interests of a sensible socioeconomic policy. We can draw confidence from those examples for the future.

The 2013 budget that the government is presenting to you today is based on the conviction that financial solidity and economic growth are indissolubly connected. Both are needed to ensure a high standard of public services for future generations. On these issues the government is ready to carry on an open and constructive exchange of views with you, members of the States General. 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.