Not so long ago, a billion euros at the Binnenhof was considered an amount of astronomical proportions. Teachers recall how they needed a series of strikes in 2017 to get the cabinet to invest €770 million in education, still only half their demand. More would really be irresponsible for the national budget, the ministers involved insisted.
That was the force of habit. You could thrive as a politician for decades by looking frugally, with a hand on the purse strings. Many finance ministers built their reputation on it.
Sigrid Kaag has only been at her post for nine months, but it is already clear that she does not follow that tradition. Within a few weeks, the cabinet has already allocated so much money in successive tranches to ease the purchasing power pain in the country that no one knows exactly how much billion it actually is. The energy ceiling for households in particular is a black hole: the government is keeping it at 23.5 billion for the time being, but everything depends on the gas price. The higher it gets, the more the cabinet has to make amends. And then the support plans for the business community have yet to come.
Kaag did not mince words about the coverage of all those billions this week during the presentation of the ceiling. Only in the spring, when hopefully there is a little more clarity about the development of the gas price, will the cabinet want to make the decision: will it be at the expense of the national debt or should cutbacks be made? This led to the unique situation on Thursday that the House of Representatives had to deal with a budget with a gap of 10 to 20 billion to perhaps 40 billion euros during the Financial Considerations.
‘Blank check’
Members of Parliament were very confused. “The minister asks us for a blank check,” said SP MP Mahir Alkaya. ‘Unacceptable’, PvdA MP Henk Nijboer thought the budget policy, ‘or rather the absence of it’. The independent MP Pieter Omtzigt brought in the Constitution, which actually states that the cabinet will submit a complete budget on Budget Day. “So we are now acting outside the Constitution.”
Kaag could not help but ask for understanding, referring to the circumstances: ‘The people in the country really couldn’t take it anymore. There were major concerns about highly unpredictable energy bills. We have to take the risk from the people where we can. That is why we consider this an acceptable step.’
In passing, she fully acknowledged that, against her ambition, she is breaking with a long tradition. ‘We must continue to pursue a prudent fiscal policy, but ‘prudent’ is indeed not the second name of this policy. It’s a rare situation. I hadn’t exactly imagined this either.’ Support from the House came from her party colleague Steven van Weyenberg: ‘We are writing a blank check for the state to prevent a blank check for the people in the country.’
There are plenty of mitigating circumstances. The need in the country is high, the House itself called for action, and no one knows how great the damage to the treasury will ultimately be. A high gas price also means more yield from the Dutch gas fields where extraction is still taking place. There are European plans to skim some of the profits from energy companies, but the details are not yet known. Kaag: ‘We have done something unprecedented and we are going to cover it, but we have not yet succeeded in that. That’s part of the zeitgeist, I think.’
Discomfort
Although there is generally understanding for this in the House, it also leads to inconvenience. After all, coverage is important for political support. Alkaya expressed this most sharply: ‘If this leads to cutbacks in healthcare, I don’t know whether we are ahead of it.’ At the other end of the spectrum, the always frugal SGP Member of Parliament Chris Stoffer promptly let it be known that Kaag should not think that she can ‘just let all those billions run into the national debt’.
And all of this is assuming that the situation is temporary. Most groups did not venture to the question of what should happen if the gas price remains high after 2023. Nor the question of how long the government can continue with these kinds of rescue actions, which have been piling up since the start of the corona crisis.
CDA MP Inge van Dijck still tried: ‘What will we do with the coverage if this will last longer than a year?’ And Stoffer also found the nerve: ‘We will perish in the safety nets. What if we soon run out of poles to tie them to?’
But that really went a bit too fast for Kaag. ‘Let’s do 2023 first. Otherwise we will make it very complicated.’