In the run-up to the general Dutch election, CPB Netherlands Bureau for Economic Policy Analysis (CPB) has assessed the economic impact of the manifestos of most political parties. What effect would their election manifestos have on the economy? What would such measures mean for public finances? Have the plans been properly costed?
The economy is in better shape than over four years ago. Public finances have improved, and austerity measures are no longer required. That is why the parties have opted to further step up public spending and/or reduce the tax burden. They have seized the opportunity to propose measures that are in keeping with their political colours. They are more successful in doing so now than they were in 2012, when most parties had to opt for cuts.
They also wish to tackle discontent within society. Although the economy is in better shape, for many people this is not adequately reflected in unemployment figures, purchasing power (different pictures for people on high and low incomes) or healthcare. However, budget constraints will continue to exist, although they will not be as squeezed as used to be the case. Some parties have used up virtually all of the budgetary room for manoeuvre. This means that the EMU balance could move into negative territory again in the event of a modest slowdown in growth, let alone stagnation or a recession. We know that the Dutch economy is very sensitive to shocks in the global economy. That poses a risk.
Moreover, under the manifestos of some parties the economic effects deteriorate would in the longer term. Their measures result in lower job creation and a budget deficit.Dutch-election-update-assessment-election-manifestos-17.pdf ()