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Budget cuts 'will cost more than they save in the long run'

The Dutch government’s austerity programme is self-defeating and could jeopardise years of social progress, according to a highly critical report by a government agency.

The Netherlands Institute for Social Research (Sociaal en Cultureel Planbureau) said the country had weathered the global financial crisis better than most up until now, but warned of “dark clouds” on the horizon because budget cuts were poorly conceived.

Measures such as increasing healthcare premiums and reducing support for childcare would cost more than they saved in the long run, said researcher Rob Bijl.

The researchers found the quality of life in the Netherlands had improved significantly in recent years, particularly for those on low-incomes, non-western immigrants and the elderly. The country recently ranked third in a United Nations survey of worldwide living standards.

But it also noted that the “bar could be higher” in education, where about 14% of 15-year-olds have low standards of literacy and too many lacked essential language and numeracy skills.

Although the budget cuts will affect everybody, people on low incomes, who have been closing the gap in recent years, are expected to be hardest hit. “This country is becoming a less attractive place to live,” Bijl said.

Bijl cited as an example rising health insurance premiums, which is likely to increase the risk of psychiatric patients, who tend to be on low incomes, going without their medication.

Such an outcome would represent a reversal of a policy which has seen 26,000 homeless people taken off the streets in the last five years through public health programmes, he said.

“In the end it costs society more. We’ll be paying the bill twice over.”

Reducing childcare support also made it more likely that mothers would cut their working hours or stay at home altogether, stifling economic growth.

“It means you lose their contribution to the economy. It’s a badly thought out measure,” said Bijl.

The study also found that 60% of people in the Netherlands are pessimistic about the future state of the ecoonomy, even though a majority believe their own finances are in good shape.

Source: De Volkskrant: SCP vindt bezuinigingen kabinet niet sociaal

Photo by Marcel van Leeuwen

See also: Netherlands Institute for Social Research (in English)