Public debt reduced by 10 billion euros
By the end of 2015, the Dutch national debt had reached a level of 442 billion euros, 10 billion euros lower than one year previously. The government was able to achieve debt reduction and finance its budget deficit with revenues from the sale of financial assets as well as loan repayments. For example, part of the ABN AMRO bank shares were sold on the stock market. Early termination of interest rate derivatives raised revenues further. The gross debt ratio thus came out at 65,1 percent.That is 3.1 percentage points lower than the ratio in December 2014, although it still exceeds the Euro convergence criteria of a 60 percent debt-to-GDP ratio. The lower debt ratio is not merely the result of debt redemption, but is to an equal extent related to an increase in GDP .
|EMU criteria||Deficit (left-hand axis)||Debt-to-GDP ratio (right-hand axis)|
Natural gas revenues cut in half
Central government, primarily consisting of the government at national level, accounted for the bulk of the budget deficit; expenditure came out 11 billion euros in excess of revenues. One year previously, the deficit was 7 instead of 11 billion euros. The deficit increase was partly caused by an extra contribution to local governments and social security funds of 8 billion euros. Central government revenues increased somewhat by slightly under 3 billion euros. Tax revenues went up by almost 8 billion euros due to both tax measures and economic growth. However, other public revenues dropped sharply: natural gas revenues were no more than 5 billion euros last year, half the level of one year previously.
|Natural gas revenues|
Social security funds in plusIn 2015, the social security funds sector ran a surplus of 1.2 billion euros after six years of heavy deficits. One of the underlying factors was the abolition of the AWBZ health care law and the introduction of an Act on Long-term Care (Wet Langdurige Zorg) following reforms in the social security system. The AWBZ care fund had shown heavy deficits in recent years, but the WLZ fund ran a slight budget surplus in its first year. The reforms in the social security system further led to shifts in expenditure. Social security funds compensated less health care expenditure, as municipal governments have taken over the funding of care for the elderly and long-term sick people.
Local government deficit stable, provincial deficits upIn 2015, the local government budget deficit amounted to slightly over 2 billion euros, the same as in the previous two years. Municipal government deficits increased somewhat to more than 1 billion euros. This level was also reached by the provincial governments last year, in contrast with the deficit of 2014 which was below 1 billion. As a result of decentralisation in the social sector, local governments’ expenditure went up. Health care expenditure, for example, rose by 7 billion euros while other expenditure was cut by 2 billion euros. On balance, expenditure by local governments increased by 4.5 billion euros. Revenues increased at a rate almost equal to the expenditure: mainly due to the transfer of revenues from central to local government, local government revenues increased at a rate nearly equal to that of expenditure.
Government expenditure remains stable
Since 2010, total government expenditure (adjusted for cash flows among the various governments) has been more or less stable at a level of over 300 billion euros. Revenues on the other hand increased following nominal GDP growth. In 2015, revenues failed to keep pace with GDP due to the decline in natural gas revenues.