Netherlands: Employment and social policy of new government
In February 2007, the partners in the Netherlands’ new government presented their coalition agreement, setting out the main policy priorities for the forthcoming administration. Jan Peter Balkenende, prime minister for the fourth time, pledged the government’s commitment to creating a society of “respect, solidarity and sustainability”. We examine the coalition’s employment and social policy.
On this page
Six “pillars”
Social cohesion
Invalidity benefit
Pensions
Family policy
Employment
Innovation, competition and entrepreneurship
Budget
Political reactions
Social partner reactions
Other reactions
Outlook
Table 1: Proposed budget
Box 1: Election results - General elections
Table 2: Distribution of seats after the elections on 22 November 2006
Box 2: Ministerial portfolios, announced on 13 February 2007
Box 3: Election results - Council elections
Table 3: Distribution of provincial council (Provinciale Staten) seats in 2003 and 2007
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Key points
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Following the Dutch general elections on 22 November 2006, three parties eventually reached agreement on forming a coalition government on 7 February 2007. They form a centre-left coalition – comprising Christian Democrats (CDA), Labour (PvdA) and the Christian Union (CU) – under Prime Minister Jan Peter Balkenende (CDA), and the first indications are that it will pursue a significantly less “libertarian” course than that of the preceding centre-right coalitions. The government was sworn in on 22 February 2007. (See box 1 for details of the election results.)
The coalition agreement states that the parties’ focus will be to “work together for growth, sustainability, respect and solidarity”. Presenting it to parliament, Balkenende expressed the partners’ common vision: “These words – ‘working together, living together’ – sum up the society we want to see: a society of respect, solidarity and sustainability. And this is how we see the Netherlands’ future. These aspirations unite us. This is what has led to this coalition agreement.”
Known as “Balkenende IV” – this is Balkenende’s fourth administration – his two deputy prime ministers, Wouter Bos (PvdA) and Andre Rouvoet (CU), are finance minister and youth and family minister respectively. (See box 2 for further details of ministerial portfolios.)
Six “pillars”
The agreement lists six “pillars”, or central messages, that will form the basis for government policy in the coming years:
- an active international and European role, so that the Netherlands remains a significant and constructive partner;
- an innovative, competitive and dynamic economy to safeguard prosperity in an increasingly competitive world;
- a sustainable living environment, including developing markets for sustainable products;
- social cohesion, because “every person counts and everyone is needed”;
- safety, stability and respect, “the basis for mutual trust”; and
- a “decisive government that stands by its citizens and binds them together, and a public sector dedicated to serving them”.
The coalition agreement contains the details of the politically most sensitive measures in some areas, while providing room for consultation with key organisations before any decisions are taken in others. Above all, the government is keen to stress its willingness to enter into dialogue with the appropriate partners, “to forge coalitions with partners in society and to encourage society to turn its objectives into joint projects”.
The agreement lists 10 projects, to be discussed later in the year. In the international section, these include plans to use private sector organisations to develop a strategy to catch up with shortfalls in the country’s execution of the UN millennium development goals. In the area of innovation, it proposes using cooperation between employers and employees, as well as education and businesses, to make the Netherlands an innovative country.
Below, we highlight proposals in the key areas of social cohesion and innovation, competition and entrepreneurship.
SOCIAL COHESION
Invalidity benefit
The programme proposes:
- raising the benefits for people claiming invalidity benefit under the occupational disability benefit Act (Wet op de arbeidsongeschiktheidsverzekering, WAO) (EER 389 p.18) who remain fully disabled;
- calling a halt to the re-examination of occupationally disabled people aged 45 years and over; and
- providing 10,000 subsidised “bridging” jobs for people with occupational disabilities.
Additionally, the body implementing employee insurance schemes (Uitvoeringsinstituut Werknemersverzekeringen, UWV) will no longer be responsible for executing the rules relating to partially and temporarily disabled people. Instead, employers will be able to insure against the risk of their staff suffering an occupational disability or bear the costs themselves.
Pensions
In a controversial proposal, from 2011, people who retired before the age of 65 and have a supplementary pension of €18,000 or more per year will be expected to make contributions to the state pension scheme.
Family policy
The programme contains the following commitments:
- to extend means-tested child support to non-working parents;
- to provide financial support for parents who make use of informal day nursery, crèche or pre-school facilities;
- to double parental leave, from 13 to 26 weeks. This will be a combination of paid and unpaid leave;
- to guarantee that lone parents receiving social assistance with children up to the age of five years will not be required to look for work, although they will be obliged to undergo training; and
- to expand the provision of work experience placements for teenagers, such as helping out in old people’s homes. Having to find appropriate placements will, however, add to teachers’ already heavy workload.
Employment
The government pledges to trace and tackle discrimination in the labour market and in the allocation of apprenticeships.The CDA lost the argument over its plan to simplify the dismissal procedure by replacing severance pay with better training for employees. Instead, the government will go along with the PvdA’s call to wait for the social partners to come up with their own proposals.
Innovation, competition and entrepreneurship
This section of the coalition programme includes the following proposals:
- providing assistance, including tax breaks, for new businesses in deprived areas;
- improving the availability of micro-credits for would-be entrepreneurs;
- providing higher subsidies for innovation in small and medium-sized enterprises (SMEs) and promising to grant SMEs more government tenders;
- cutting corporate red tape by 25% over the next four years;
- maintaining and improving the national innovation platform emanating from the EU’s Lisbon growth and jobs agenda agreed in April 2000 (EER 316 p.23) and which focuses on promoting innovation through research, publicity, good practice, seminars, conferences, media and other publicity;
- reducing the restrictions on well educated migrants and craftworkers; and
- promoting entrepreneurship in education.
Budget
The new government’s proposed spending plan is set against the background of a more favourable economic situation than previous government programmes. As a result, the government has more scope to maintain social spending and is not expecting to withdraw improvements that have already been introduced. Additionally, it has made commitments to invest in education, the environment, healthcare, housing and health insurance subsidies. Average economic growth of 2% a year is assumed by the government, which has drawn up spending plans, amounting to €17 billion (see table 1).
Political reactions
The coalition’s parliamentary groups (CDA, PvdA and CU) approved the coalition agreement on 6 February 2007.
The parliamentary opposition criticised it on several fronts. According to Jan Marijnissen of the Socialist party (SP), while the agreement has “laudable ambitions” – such as halving the school drop-out rate and improving living conditions – the overall approach is unclear and this programme is not significantly different from that of previous governments. The SP welcomed the programme’s investment in the environment, its commitment to raise social housing rents by no more than inflation and a general amnesty for asylum seekers. However, it criticised the fact that mortgage tax relief remains untouched and that the government still plans to support the US-led Joint Strike Fighter project financially.
For the VVD centre-right liberal party, Mark Rutte criticised the government’s policies, which he found “very bad” – pointing, in particular, at the general amnesty for asylum seekers, which he found “extraordinarily irresponsible”. He expressed his party’s fears that the policy will encourage new asylum seekers, in contrast to the asylum policy instituted by the previous immigration minister, Rita Verdonk (VVD). He disparaged the government’s promised investments in society, claiming that it has no idea what is really needed. Finally, Rutte said it is “bad news” that “hard-working people will have to pay an extra €2.5 billion, on top of their current tax burdens.”
The Green Left leader, Femke Halsema, called the agreement “flat and drearily conventional”. The party criticised it as making no attempt to sort out urgent societal problems, although it acknowledged that there are some good policies for children. It also welcomed the general amnesty for asylum seekers, and the abandonment of rent liberalisation and ensuing rent rises. Halsema argued that the environmental policy for countering global warming is not sufficiently wide-ranging. The Greens also felt that the programme does no service to the cause of women’s emancipation by rewarding women for staying at home and abolishing the obligation for lone mothers on benefit to apply for work.
Geert Wilders, the leader of the right-wing PVV Freedom party, called the agreement “terrible”. The general amnesty for asylum seekers will, he claimed, bring the country “to the edge of the abyss”, because “the tens of thousands who have cheated and lied to get their residents’ permit will now be helped.” He claimed that nothing was being done “to stop the Islamic invasion”. He regretted the government’s decision to allow the state council (Raad van State) to decide whether or not to hold a new referendum on the EU constitutional treaty (the Dutch voted against it in June 2005). Wilders claimed the coalition agreement was a “victory” for the PvdA, claiming that the CDA had lost ground on most issues. He criticised the imposition of state pension contributions on better-off early retirees and claimed that increases in the tax burden cancelled out any tax reductions.
Social partner reactions
The FNV and CNV trade union confederations and the MKB Nederland employers’ federation for SMEs have reacted reasonably positively to the new agreement. Agnes Jongerius, FNV chair, said: “I see many good issues but also a number of problems.” CNV chair, René Paas, said: “It is a step in the right direction but still has further to go in many areas.” Loek Hermans, chair of MKB Nederland, said: “There are some good ideas, but more attention should have been paid to whether they will work for businesses.”
All the social partners welcome the plans to invest €1.2 billion in increasing labour participation, although Jongerius said that it was unclear what measures would be implemented. She highlighted potential problems in the area of healthcare. Paas criticised the plans to cut the civil service, and also found it “unbelievable” that the government is planning to cap redundancy pay for civil servants at a maximum of one year’s salary.
Hermans welcomed the fact that the new government is not planning to reverse recent changes to the social security system and also stressed the importance of the participation agenda. At the same time, he said the government has to ensure that employers, especially the smaller ones, have enough support to realise the participation plans. Hermans was negative towards extending parental leave, claiming it could threaten the country’s international competitiveness.
Other reactions
BOink, a childcare organisation for parents, welcomed a proposal designed to increase labour participation by reducing nursery costs. In future, employers will be obliged to contribute and the government will increase its subsidy.
The Foundation for Nature and Environment stated that the government’s green credentials were insufficient; Mirjam de Rijk, the foundation’s spokesperson, criticised the environmental taxes for not going far enough.
The branch organisation for the tobacco retail trade, NSO, reluctantly accepted €200 million increases in alcohol and tobacco duties. The anti-EU “committee for no/other Europe” fears that the government will accept a new EU constitutional treaty without the consent of the population. Finally, the foundation for responsible alcohol called prohibiting broadcast commercials for drinks containing alcohol until after 9pm “symbolic”.
Outlook
Commentators suggest that this administration may be more durable than the previous three led by Balkenende, all of which collapsed. Since the small liberal party, D66, which had largely triggered the crises, is no longer in a position of influence, the situation looks hopeful.
This article was written by Beatrice Harper, researcher/writer, European Employment Review.
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Table 1: Proposed budget | |||
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Income |
Billion € |
Spending |
Billion € |
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Increased burden of taxation |
2.5 |
Reducing tax burden |
3 |
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Reduction in spending |
6.25 |
New spending |
7 |
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2% economic growth |
8.25 |
Reduction of state debt |
7 |
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17 |
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17 |
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Income |
Million € |
Spending |
Million € |
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Taxation of air tickets |
350 |
Labour market measures |
1,200 |
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Environmental tax on fuel |
350 |
Economic structure |
500 |
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Levy on drinks cans |
150 |
Family measures |
500 |
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Higher duty on alcohol and tobacco |
200 |
Purchasing power support |
800 |
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Higher VAT on fares |
100 |
Defence |
200 |
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Freezing of general tax reductions |
1,200 |
Development cooperation |
200 |
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Civil service reductions |
750 |
Education |
1,000 |
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Reductions in social security bureaucracy |
480 |
Innovation, knowledge, research |
300 |
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Better healthcare management |
500 |
Entrepreneurship |
200 |
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Reduction in subsidies |
250 |
Sustainable energy |
500 |
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Reduction in housing corporation capital |
750 |
Dwellings and social integration |
600 |
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Raising age for receiving social assistance to 27 years |
250 |
Measures addressing poverty |
280 |
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Combating fraud; higher fines |
440 |
Childcare (day nursery) |
700 |
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Sale of defence buildings and land |
200 |
Occupational disability benefit |
520 |
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Other efficiency measures |
620 |
Youth and family |
400 |
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Other budgetary reductions |
810 |
Security |
700 |
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Reduced contribution to municipality and provincial funds |
550 |
Healthcare |
500 |
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Other posts |
700 |
Public broadcasting subsidy |
100 |
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Culture |
100 | ||
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Sports |
20 | ||
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Other posts |
5 | ||
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Billion € |
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Billion € |
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Income subtotal |
8.75 |
Spending subtotal |
10 |
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Extra income from economic growth (average 2% growth/year) |
8.25 |
Reduction state debt |
7 |
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Income total |
17 |
Spending total |
17 |
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Box 1: Election results – General
elections The 2006 Dutch general elections to the lower house of parliament were held on 22 November 2006. The lower house (Tweede Kamer) has 150 seats. | ||
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Distribution of seats after the elections on 22 November 2006 | ||
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Party |
Number of votes |
Number of seats (2003 result) |
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Christian Democratic Appeal (CDA) |
2,608,573 |
41 (44) |
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Labour party (PvdA) |
2,085,077 |
33 (42) |
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Socialist party (SP) |
1,630,803 |
25 (9) |
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People’s Party for Freedom and Democracy (VVD) |
1,443,312 |
22 (28) |
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Group Wilders/Freedom party (PVV) |
579,490 |
9 (–) |
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Green Left (GL) |
453,054 |
7 (8) |
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List Pim Fortuyn (LPF) |
– |
– (8) |
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Christian Union (CU) |
390,969 |
6 (3) |
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Democrats 66 (D66) |
193,232 |
3 (6) |
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Calvinist Political Party (SGP) |
153,266 |
2 (6) |
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Party for the Animals (PvdD) |
179,988 |
2 (–) |
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Box 3: Election results – Council elections The results of the elections to the 12 provincial councils dictate the allocation of seats in the upper house, the senate (Eerste Kamer); its appointment follows three months later. The function of the upper house is to examine legislation that has already been passed by parliament. It cannot make amendments but can suggest supplementary legislation. Provincial elections were held on 7 March 2007. Turnout was slightly lower than in 2003 – 46.3%, compared with 46.7%. The new government coalition held on to the majority of the 75 seats, but the main winner was the SP, which overtook the PvdA in two provinces (Noord-Brabant and Limburg), increasing its seats in the senate from four to 15. The PvdA was the biggest loser, shedding almost 400,000 votes and losing four seats, from 19 in 2003 to 15 in the new chamber. The VVD achieved a similar result to that in 2003. The animal rights party ran for the first time and will be allocated one seat in the senate. Almost four times the number of spoilt or blank ballot papers were returned in 2007, compared with 2003. It is thought that this may have been as a direct result of a call by Geert Wilders (PVV) – his party was not involved in the provincial elections because he could not field enough candidates, so he advised his supporters to return blank ballot papers. These were especially prevalent in Limburg, and Rijnmond/Westland (in the Rotterdam area and the province of South Holland). | ||
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Distribution of provincial council (Provinciale Staten) seats in 2007 and 2003 | ||
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Party |
Seats 2007 |
Seats 2003 |
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CDA |
151 |
169 |
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PvdA |
114 |
150 |
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VVD |
102 |
103 |
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SP |
83 |
29 |
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CU |
38 |
22 |
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Green Left |
32 |
37 |
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SGP (Staats Gereformeerde Partij |
13 |
14 |
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D66 |
9 |
20 |
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Animal party |
9 |
– |
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Fortuyn |
0 |
4 |
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Others |
13 |
16 |
European Employment Review 399 (EER 399): contents
