What is the national budget?

 

Every ministry draws up its own budget. The Minister of Finance collates all the individual budgets and presents them to the House of Representatives every year on Budget Day (the third Tuesday in September), together with the budget memorandum and the tax plan. These budgets are acts of parliament and are valid for one year. In the months following Budget Day, all the ministers and state secretaries come to the House of Representatives to discuss the government’s plans with MPs. Once the House of Representatives and the Senate have approved the plans, the budgets can be adopted and the money can be spent in the year concerned. If it becomes clear in the course of the year that either more or less money is required than the amount approved for each budget article, the budget is amended by means of a supplementary budget act. At the end of the year, the Central Government Audit Service and the Court of Audit check that money has been spent in accordance with the rules. This is the case for more than 99% of expenditure.

Structure of the national budget

A budget consists of articles. Each article relates to a particular objective or government task. An article is sometimes divided into subarticles. Within an article, various financial instruments can be used, such as grants, contributions to international organisations and public procurement contracts. The recipients include private individuals, public organisations and businesses. For the full list of all 12 financial instruments (in Dutch), see: https://www.rbv.minfin.nl/2017/begrippenlijst/financiele-instrumenten. In addition, money is spent on the staff and equipment that central government needs to function properly (‘administrative expenditure’).

Budget process

Every ministry draws up its own budget. The Minister of Finance collates all the individual budgets and presents them to the House of Representatives every year on Budget Day (the third Tuesday in September), together with the budget memorandum and the tax plan. These budgets are acts of parliament and are valid for one year. In the months following Budget Day, all the ministers and state secretaries come to the House of Representatives to discuss the government’s plans with MPs. Once the House of Representatives and the Senate have approved the plans, the budgets can be adopted and the money can be spent in the year concerned. If it becomes clear in the course of the year that either more or less money is required than the amount approved for each budget article, the budget is amended by means of a supplementary budget act. At the end of the year, the Central Government Audit Service and the Court of Audit check that money has been spent in accordance with the rules. This is the case for more than 99% of expenditure.

Content of the budget

The national budget actually consists of several separate budgets (known as budget chapters), which fall into 3 categories:

  • Budgets of the individual ministries. These tend to be the larger budgets, financially speaking.
  • Budgets of parts of central government such as the Royal House and the States General. These tend to be smaller budgets.
  • Budgets of the funds, like the fund for financing municipalities and the fund for financing multiyear infrastructural projects (roads, bridges, hydraulic engineering works).

Much of the expenditure in these budgets is already fixed. For example, the money we spend on social security benefits and basic healthcare for all. But this does not apply to all expenditure. Every year a decision has to be made on what requires extra money and where that money should come from. Budget acts lay down maximum amounts for each budget article. In principle, ministers are not allowed to spend more on a particular item than is specified in the budget, but they are allowed to spend less. A budget consists of two parts: the budget act and the explanatory memorandum. For each budget act, the explanatory memorandum states the objectives to be achieved and what has changed in relation to previous years. The full text (in Dutch) of the budget acts and explanatory memorandums is available at www.rijksbegroting.nl