Social partners dissatisfied with distribution of financial windfalls in 2001 budget

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The Dutch government's 2001 budget, announced in September 2000, will use a major surplus to ease the tax and contribution burden on companies and individuals, accelerate repayment of government debt, and provide extra resources for the public sector. Nonetheless, the social partners are dissatisfied and feel that investments and tax and contribution cuts are still distributed unevenly. While employers are calling for additional investment in physical infrastructure, the unions believe that problems in the public sector are not being taken seriously enough.

The Dutch government announced its national budget for 2001 in September 2000. Both the government and the press have described the budget as generous, with a historic surplus of NLG 30 billion to be used to ease the tax and contribution burden on companies and individuals and to speed up repayment of government debt, while the public sector – particularly education and healthcare – will receive extra resources to combat personnel shortages.

The Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) and the General Federation of Trade Unions (Algemene Vakcentrale, AVC) were unanimous in their response to the 2001 government budget announcement. They want to see more investment in public welfare and social cohesion - in short, in people. In its alternative budget, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) calls for an extra injection of NLG 4 billion each for both the healthcare sector and the education sector, while the cabinet has earmarked only NLG 3.7 billion extra for the healthcare sector and NLG 1.4 billion for the education sector. CNV also feels that the extra resources to be allocated represent only the beginning of a solution. The General Teachers' Union (Algemene Onderwijsbond), the National Medical Practitioners' Association (Landelijke Huisartsenvereniging) and NU'91, the nursing union, support this critical stance. In their eyes, the government underestimates the seriousness of the situation. In addition to further investments in the healthcare and education sectors, FNV believes that more funds should be made available for investments directed at combating poverty, alleviating bottlenecks in the labour market and addressing environmental issues.

The VNO-NCW employers' association concurs with the teachers' union to the extent that it finds the investments in vocational education inadequate. For the employers. the Netherlands' competitive position within the EU is at stake, even more so because the Dutch government is seen to have released insufficient funds for investment in roads and public transport. Measures to alleviate the tax and contribution burden on companies are still deemed inadequate, while the gap between social security benefits levels and wages remains limited. Incentives to participate in the labour market are seen as too limited by VNO-NCW, and the so-called poverty trap continues to pose a threat due to waning income-based subsidies. According to VNO-NCW, labour market mechanisms would be better served by scrapping income-based subsidies while implementing a reduction in the tax and contribution burden at the same time. Finally, the Dutch Federation of Small and Medium-sized Enterprises (Midden- en Kleinbedrijf Nederland, MKB) criticises the budget as a political budget that focuses largely on investment in the public sector, while it remains to be seen if this will generate the desired results.