On 29 March 2013, the Dutch Central Bureau of Statistics (www.cbs.nl) presented two press releases on the Dutch economy.
In my opinion, these press releases made minced meat of:
- the government policies of the Cabinets Rutte I and Rutte II for 2012 and beyond;
- the overly optimistic outlook for the second half of 2013 and whole 2014 by the Central Planning Bureau;
Here are both press releases by the CBS:
According to Statistics Netherlands’ second estimate of economic growth, the Dutch economy shrank by 0.4% in the fourth quarter of 2012 compared with the preceding quarter. The first estimate, published on 14 February put the contraction at 0.2%.
Compared with twelve months previously, the economy shrank by 1.2% in the fourth quarter. According to the first estimate this was 0.9%. For the whole year, the economy contracted by 1.0% in 2012. The first estimate calculated this to be 0.9%.
On the basis of new information, consumption by the government has been adjusted downwards. Municipalities in particular have spent less than initially estimated. Consumption by households and the trade surplus were also slightly lower than previously estimated. Investment spending remained at the same level. Production by the mineral extraction sector was also corrected downwards.
Employment fell by slightly less than previously reported. Compared with the third quarter, there were 17,000 fewer employee jobs in the fourth quarter. According to the first estimate, the decrease was 18,000. And compared with the same period in the previous year there were 89,000 fewer jobs, not 93,000 fewer. This is a 1.1% decrease. The wage per working year wage was 1.0% higher than in the fourth quarter of 2011.
That the estimate for 2012Q4, which initially spoke of 0.2% contraction in the Dutch economy, has been negatively adjusted by -0.2% yesterday, did hardly come as a surprise for me. In the beginning of 2013, I found it rather surprising that the Dutch economy only shrunk by 0.2% in 2012Q4, according to the CBS. At that time, all signals on the Dutch economy were dark red!
Yesterday, we found out that these original estimates indeed had been too optimistic. And in April 2013, we will definitely learn that 2013Q1 will have had a contracting economy as well. The data (after adjustments) for the current period might be even worse than in the last quarter of 2012.
- Sharpest fall in available income in over 20 years
- Mortgage debt rises by only 0.1%
- Lower business profits
Real disposable income of households in the Netherlands has fallen for the fifth year in a row: by 3.2% in 2012. This is the largest decrease in disposable income since the series started in 1982. The decrease was caused by lower employment, higher tax and premium transfers, and inflation. At 2.5%, inflation was well above the average 1.6% rise in collectively negotiated wage rates. Partly because of the fall in income, consumption expenditure by households fell by 1.4% in 2012.
Because of the stagnation on the house market and higher mortgage repayments, the total mortgage debt rose by only 0.1%. In the years 1994-2007 this mortgage debt rose by an average 12% per year.
Well, there you have it. The government policies of Rutte I and Rutte II led to a 3% decline in household income in 2012, for a considerable part caused by ‘higher tax and premium transfers, and inflation’.
By the way, you can bet that most of the inflation mentioned here is spurred by increased government premiums as well: how about the ever rising parking costs in Dutch cities and costs for municipal permits and government services? How about the soaring rates for traffic penalties, which turned The Netherlands into one of the most expensive countries in Europe, in only a few years?!
While the people of The Netherlands earned less income and even lost their jobs, due to the difficult economic situation, almost all national and local taxes, premiums and fees for government services soared during the last few years. The Dutch central and local governments are addicted to tax money and nobody can stop this addiction, it seems!
Most Dutch citizens cannot help, but feeling like a piggy bank for the government. The consequences will be crystal-clear, in my humble opinion: no growth in 2013 and almost no growth 2014. You may remind me of these predictions!