The Dutch government achieved an 11 billion euro budget surplus in 2018, which equivalent to 1.5 percent of gross domestic product (GDP). As it thus appears that the economy is booming, it becomes the question whether it is important to use this surplus to pay off the national debt According to Sandra Phlippen, Assistant Professor at Erasmus School of Economics and Head for the Netherlands of ABN AMRO’s Group Economics, this is not a good idea at all.
On Tuesday 26 March 2019, Statistics Netherlands (CBS) reported the Dutch government finance statistics on the basis of new figures on public finances. According to these figures, the Dutch government achieved a budget surplus for the second consecutive year. The realised surplus is 1.5 percent of GDP, which is considerably higher than was expected by the Minister of Finance Wopke Hoekstra during the Budget Memorandum of 2019. Then, only a surplus of 0.8 percent was expected.
Despite the fact that the government debt has declined, Finance Minister Wopke Hoekstra says that this windfall does not implythat taxes can be further reduced, or that, for example, education and healthcare can count on even more extra money. Assistant professor Sandra Phlippen however thinks differently about how the money should be spend. 'We must stop seeing the interest costs of the national debt as sin money’, she says. Sandra Phlippen thinks it is a better idea to meet the needs of Dutch consumers who face a considerable increase in their energy bills and an expected income loss on average as a result of climate policies.
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Listen to the entire podcast on BNR Nieuwsradio, d.d. 26 March 2019
