In 2005, public expenditure on defence totalled 7.5 billion euro, i.e. 1.5 percent of the Dutch Gross Domestic Product (GDP). Approximately the same proportion of the GDP was spent in the period 2002 – 2004.
Per capita spending on defence averages 457 euro
Per capita spending on defence averaged 457 euro in 2005, as against 421 euro in 2000, an increase by almost 9 percent in half a decade. However, the inflation rate over this period was higher.
More money available for foreign military aid
In 2005, the government spent 215 million euro on foreign military aid, almost 9 percent more than in 2001. The amount for 2004 was 243 million euro, due to the Dutch contribution to the stabilisation force in Iraq (80 million euro). In 2005, the amount earmarked for Iraq was 42 million euro; 76 million euro was earmarked for the Dutch military contingent in Afghanistan and the financial contribution to the UN was 53 million euro. UN and NATO compensate the Netherlands for their contribution to international peacekeeping operations.
Reduced growth wage costs
In the period 2000–2005, defence spending rose by nearly 0.8 billion euro; 0.6 billion euro was spent on wages. Particularly in the period 2000–2003, the increase in wage costs was considerable. In the period 2004-2005, wage costs increased by only 2 percent after major staff cuts and a very moderate collectively negotiated wage rise.
Spending on durable goods and services fell by 0.1 billion euro between 2000 and 2005, due to cuts in the investment budget imposed by the government in 2004 and 2005.
Military spending by type of cost
Considerable staff cuts
In June 2006, there were more than 63 thousand full-time jobs in the Ministry of Defence, 8.8 thousand down on the end of 2002, a 12 percent decrease. Civilian personnel were cut by more than 20 percent. Regular personnel on permanent contracts (BOT) were cut by more than 14 percent, whereas regular personnel on fixed-term contracts (BBT) were reduced by less than 3 percent. This was the result of a reorganisation process, which aimed to reduce the large number of persons serving in staff positions, mainly occupied by civilian and BOT personnel, while operating staff (mostly employed on a BBT contract basis) were not affected.
Full-time jobs by type of staff