Government spending down slightly in 2004

11/10/2005 14:00

Dutch government spending came to 130.1 billion euro in 2004, 0.5 percent less than in 2003. In 2003 government spending increased by 6.4 percent. 

Government spending


Most money for social provisions and education

Social provisions account for the largest spending category  (24.5 billion euro), followed by education (24.0 billion euro). Spending on traffic, transport, communication and water management decreased by 0.7 billion euro in 2004. This was mainly connected with the lower costs for the construction of the southern part of the high-speed rail link. Further, less money was put aside for management and maintenance of dams and dykes, and the regional mobility funds also received less from government coffers.

Government spending per policy area, 2004


Money for social provisions

Spending on social provisions was 0.7 billion euro lower in 2004 than in 2003. Less money was spent on funds for national benefits (old age pension, benefits for widows and orphans) in particular. Furthermore the reduction in the number of asylumseekers arriving in the Netherlands meant spending in this area also decreased.

Funds for regional government

Transfers to funds for regional government  (municipal funds, provincial funds and the VAT compensation fund) fell by 2.2 billion euro. Most of this decrease was caused by the introduction of the VAT compensation fund in 2003, accounting for 1.7 billion euro. In order to negate the effects of this transfer on the overall budget, the government reduced its contribution to municipal and provincial funds by the same amount in 2004. Moreover, 0.3 billion euro was taken out of the municipal funds as a result of the transfer of funding for childcare to the Ministry of Social Affairs and Employment and the restriction of payments to minimum income households

Development of government spending per policy area, 2004

1.6 billion euro more for health care

Spending on health care rose by most in 2004, to 9.5 billion euro. This is 1.6 billion euro (20 percent) more than in 2003, nearly all connected with the transfers by central government to the fund for exceptional medical expenses <<link naar 1795k4.doc>> to compensate the disappointing income from premiums as a result of the introduction of the new tax system in 2001.

More money to education and general administration

Spending on education and general administration also rose in 2004. In secondary education, study financing and the implementation of collectively negotiated agreements resulted in an increase from central government funds of 0.5 billion euro. Measures to reduce teacher shortages and  improve special needs education resulted in an extra contribution by central government to primary education of 0.2 billion euro. In general administration, 0.7 billion euro was the result of the higher payments to the European Union.

Fred Arkesteijn