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Prince’s Day: a budget just before the elections. An opportunity or a risk?

In the summer, the government fell over migration. The more conservative course of the VVD went straight against the more progressive course of the smallest governing party. New elections were called for 22 November. This meant that the incumbent government would present a new budget just before the elections. A reflection on the current political situation by Simon Otjes.

It sounds like the upcoming Prince’s Day, but this is about 2006, 17 years ago. The two situations are incredibly similar: both governments (Rutte IV and Balkenende II) fell in the summer. Both governments fell over migration (the proposal to limit migration now, the Ayaan Hirshi Ali case then). In both cases, it was the smallest governing party (ChristenUnie now, D66 then) that stood firm. In both cases, elections were scheduled for 22 November. And in both cases, an incumbent government came up with a budget just before.

Fotografie Bas Arps cc-by-2.0

First the sour then the sweet

The Balkenende II government had started in 2003 under the informal motto "first the sour, then the sweet". Balkenende II was a reform government that initiated a number of major changes to the welfare state, such as a new healthcare system. In the first years of the government, it focused on spending cuts and tax increases to balance the budget and on wage restraint to encourage economic growth. These came at the expense of citizens' purchasing power. Balkenende's promise was that this 'sour' in the government's early period would be compensated with 'sweet' in the government's final period: when the budget was in order and the economy started to grow again, taxes would go down and allowances would go up.

And so, in 2006, that government was able to present a jubilant budget: the economy was growing, unemployment was falling, the business climate had improved, the budget was in surplus, taxes were going down, as a result of which citizens' purchasing power was increasing and consumer and business confidence had risen. Opposition parties could do little other than express their joy 'that after four years of giving in, people are improving again' in the words of Wouter Bos (PvdA).

Satisfaction with the government's policies was also reflected in voter surveys around the elections: this had grown significantly compared to 2003. More people believed that government policy had had a favourable impact on the economy than an unfavourable one. The campaign focused on economic themes and voters who were positive about the government's policies ended up with the governing parties, especially the CDA.

After a tough election battle with the Labour Party, the CDA maintained its position as the largest party in the 2006 elections. But coalition party VVD, which emerged from a tough leadership battle, did not benefit from the economic upturn

From sweet to sour

As before the 2006 elections, the Rutte IV government is now presenting a budget just before the elections. But where the Balkenende III government was able to present a jubilant budget full of sweet for voters, the picture now is much bleaker. When the parties were forming on the Rutte IV government, money was sloshing against the skirting boards. But in times of inflation, economic downturn and war, the government now has to make hard choices: the government wants to simultaneously protect citizens' livelihoods in times of inflation, get the budget in order while the economy shrinks and invest in defence because of the war on the European continent.

'It is unlikely that a gloomy budget plan will change voters' negative attitude towards this government.'

Achieving these three goals simultaneously is a difficult task. Initial choices now leaked indicate that purchasing power in 2024 will still be lower than before the period of high inflation. It is unlikely that a gloomy budget plan will change voters' negative attitude towards this government.

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