Experts: Rising healthcare costs are a headache for the new government

Bas van den Dongen, the finance ministry’s top official, said during today’s formation negotiations that healthcare costs will rise by billions of euros in the coming years, and the new government will have to do something about it. “It is an important task for the parties formed to reduce these costs.”

Van den Dungen was invited together with the President of De Nederlandsche Bank and Director of the Central Planning Office (CPB). “It is important that the government look closely at this, specifically to make room for other necessary spending, for climate, for defence, whatever the desires,” van den Dongen said after the conversation. Formed parties do not have much space to spend at the structural level.

10 billion increase

In the next cabinet term, healthcare costs will rise by around €10 billion. CPB Director Peter Hascamp added that this is far more than any other expense component. This increase is due to an aging population and an increase in wages and also due to new desires and technological developments.

If the new government does not reduce health care costs, there will be little money left for other desires, such as climate, defense, tax cuts or a pay rise for civil servants. This is a structural expense that recurs every year, and the formed parties do not have much room for this.

Borrow money for free

It was previously announced that the formed parties are considering borrowing additional funds for issues such as nitrogen, climate and infrastructure. Then this passes through special extra-budgetary funds. “We are cautious about such a structure,” CPB’s Haskamp said. “If you allocate money around a regular budget, you go through the normal conventions.”

Borrowing money is now virtually free for the Dutch government, “but we don’t know if it will remain that way in the coming years,” warns the CPB. Klaas Knot of DNB is also skeptical about this. “Everything the government spends must eventually be funded. Ultimately it must be paid for with taxpayers’ money. This fact does not go away.”