Figures released by Statistics Netherlands indicate that public expenditure on defence was reduced by 191 million euros too 7.4 billion euros last year. The reduction was most substantial for investments in new military arms. The largest cost item for defence, spending on wages and social contributions, remained the same. Defence expenditure has decreased by 1.1 billion euros since 2009.
Defence-to-GDP ratio also lower
Expressed as a percentage of the gross domestic product (GDP), which indicates the size of the Dutch economy, public expenditure on defence has been on the decrease for five years. In 2009, 1.4 percent of GDP was spent on defence, but this fell to 1.1 percent in 2014. There has been a trend-related decline in defence expenditure as a percentage of GDP for several decades.
Reduction in military arms procurement
The decrease in defence expenditure was mainly due to the fact that investments in military arms were reduced by 280 million euros. Expenditure was higher in 2013, however, due to an incidental effect: the delivery of two test aircraft.
The procurement of goods and services went up by 117 million euros over 2013. The increase is largely related to increasing costs of maintenance and repair of military equipment. In addition, maintenance costs of automation, and procurement costs for ammunition have gone up. The reduction in defence expenditure has a downward effect on imports of defence equipment, see Continuing decrease in Dutch imports of arms and ammunition.
Defence expenditure of the Netherlands lags behind internationally
The Dutch defence-to-GDP ratio in 2013 was 1.2 percent, lower than the EU average of 1.4 percent, putting the Netherlands on position 14 in the EU ranking. Among EU countries, the United Kingdom and Greece spent relatively the highest amount on defence, while Ireland and Luxembourg spent relatively the least. In a report published on 11 September 2015, Statistics Netherlands is looking more closely at the international comparison of public defence expenditure worldwide. The report also includes a description of the expenditure norms applied by the NATO.