Van Apeldoorn: Government should combat child poverty, not serve the interests of multinationals

12 December 2017

Van Apeldoorn: Government should combat child poverty, not serve the interests of multinationals

It's beyond belief that the new government is doing nothing for the one in nine children growing up in poverty in the Netherlands, yet has chosen to make a gift of €1.4 billion to foreign investors and multinationals. This was the theme running through SP Senator Bastiaan van Apeldoorn's speech in the Senate during today's debate on the budget for the coming period.

Van Apeldoorn wants to know how the government will be implementing the motion proposed by his SP colleague Tiny Kox and approved last week by a majority in the Senate. The motion calls for the government to come up with a concrete plan to address child poverty in the Netherlands. Below are a résumé of and selections from Senator van Apeldoorn's contribution to the debate.

Naturally, given that the debate concerned the budget, and given that the bulk of the budget is aimed at financing domestic policies, the Senator's speech also focused largely on matters close to home. Foreign policy initiatives also cost money, however, so Van Apeldoorn began by questioning the government's priorities across the board. He noted that the debate concerned both expenditure and taxation, and “spending and income are of course inseparably linked to one another. Expenditure on the one hand and its financing on the other to a large extent give direction to society. How much money you raise and where you spend it are crucial political choices. Do you opt for accessible, good quality health care without imposing fines on the sick or do you satisfy yourself with a freeze on the 'own risk' payment in exchange for an increase in premiums? Do you act to tackle division and inequality in society by, for instance, a structural increase in benefits and greater investment in combating poverty, or do you reduce benefits which already for years have lagged behind, or lower the benefits paid to the most vulnerable groups in our society? Do you invest in our military, or in the further militarisation of international relations and the counter-productive war on terror? Whatever choices you can make in the expenditure column are of course in the first place dependant on how much you collect in taxes. The total extent of state finances, and of our public sector, is also a political choice, and then it's a fundamental political choice from whom you extract these taxes, whether you allow extra taxes to bear down on those for whom life is already so expensive and those who have already handed over the most or on those who have made the most progress, who have done best. Or do you lighten the burden on those who create value, or on those who usurp that value? Do you lighten the burden for working people in the Netherlands or for states and shareholders abroad?

“It must be obvious that (the SP) is of the opinion that the new government does not always make the right choices. Some of these choices we can applaud, or at least see as being steps in the right direction, but in the end our conclusion is that this government is not investing sufficiently in society, in people. When they put multinationals before people, this government cannot count on our support.

“The new government is inheriting from its predecessor a balanced budget, a national debt which is falling and an economy which, after a triple-dip recession has at last returned to growth. But this minister also inherits a Netherlands in which divisions are growing and where, thanks to Prime Minister Mark Rutte's two terms in government and the spending cuts he imposed, the public sector is impoverished. A catch up in terms of public investment is therefore desperately needed. Moreover, what was revealed by the financial crisis of 2008 was that the relations between the real economy and the financial sector as well as those between labour and capital had become completely absurd.”

Van Apeldoorn went on to detail how disposable incomes had risen more in the higher brackets than amongst those whose wages were already low. Given this, the senator wanted the minister to explain why the government has no plans to address the problem, “why inequality is evidently not a theme”, why it went unmentioned in the coalition agreement on which the multi-party government was based. “Does the minister find it normal that in the Netherlands 10% of households own 66% of the wealth?

“Where the growing division in the society is perhaps most distressing is in the persistent poverty amongst children. One in nine children is growing up in poverty,” and as the children's ombudsman has recently pointed out, “children who grow up in poverty face a great deal of stress and tension at home” and find their lives and school more difficult and have fewer chances to develop. “Tackling this problem seems to me an absolute duty,” Van Apeldoorn insisted. “So our group is pleased with the cross-party support for the Kox motion” - proposed by the SP's leader in the Senate - “which calls on the the government to accept the policy recommendation of the Social and Economic Council to come up with a government-wide reduction target and thus a realistic structural lowering of the number of children that grow up in poverty. We will of course pay close attention to the implementation of this motion.”

Van Apeldoorn went on to criticise the government for continuing its predecessors' austerity policies when the country has returned to strong growth. Cuts in benefits for people with disabilities; wages lagging behind the growth in productivity and the proportion of income paid out in wages at an historic low. Such things were not only a problem from the standpoint of social justice, but were also bad for the economy, as even those who have in the past called for wage moderation, including the prime minister himself and the president of the Netherlands' national bank, now recognised.

Van Apeldoorn then turned to the question of public investment. True, funds have been increased for primary education and for home care, as well as for the police. The SP welcomed these improvements, which were badly needed. But, he continued, on closer examination it's clear that this is insufficient to make up for previous cuts. Election promises have been broken. Teachers in primary education had good reason for their recent strike. It was the same story across the board, in relation to higher education, justice and security. Yet, he said “there's enough money for additional investments in the quality of our society. That's a question of making choices. A political choice that the government is making is to maintain a budgetary surplus for the next few years. The SP would rather see a different choice. If society's needs remain so high and if the economy has only just hauled itself out of a deep slump and right now needs investments in order to become sustainably future-proof, you shouldn't be hoarding your money.” All of the needed investments could be financed, without running up a deficit, if the rich were properly taxed.

Van Apeldoorn then returned to the matter of child poverty and its relation to the tax sweeteners being handed to multinationals, saying that “the SP finds it incomprehensible that there is so little in the coalition agreement regarding this government's plans in regard to poverty amongst children while at the same time it's been announced that €1.4 billion a year is to be thrown down the drain to keep the boardrooms of Shell and Unilever happy.” Referring to the use by the Central Planning Bureau of the expression “tax relief for foreign countries”, the Senator said he had never come across the term before. “Tax relief for foreign countries,” he repeated, “alias the mega-gift for those who who don't need it and at the expense of those who could make very good use of it.” This would be an annual gift, year in, year out. He wondered what the various coalition partners thought about it, and was surprised they'd accepted it. “The fact that one partner, the centrist D66, has said that this is no done deal, gives hope.” That was speculation, however. “All we know for sure is that the citizens of the Netherlands aren't keen on it at all.”.

One thing that was clear was that “much of this tax money would be flowing straight to the treasuries of other countries, principally the US. Where it's being given away to foreign shareholders, the SP's expectation is for negative rather than positive effects. It certainly won't help to prevent our firms from hostile takeovers.

“The planned abolition of the tax on dividends is for us a sign that this government has allowed itself to be tyrannized by the big business lobby. Of course this isn't the first time that this has happened. The power of the multinationals and of the financial sector is much too great. The political influence of the boardrooms of Shell and Unilever, so evident in (the new government), means nothing less than a hollowing out of our democracy. Or can the minister explain what the democratic basis is of a proposal which did not appear in any election manifesto?”

There has been no clear explanation of the reasons for these measures, but as far as we have had any explanation at all “for this gift of an annual €1.4 billion, it comes down to the fact that above all we have to give way to pressure from mobile capital... to activist shareholders...(and) go along with tax competition...” And all of this, he continued, while the Netherlands has long been a tax haven for these same multinationals. And, he added, tax on profits in the countries around us is higher than the proposed reduced high rate in the Netherlands of 21%. “So we're in the lead in the race to the bottom.”

The parliamentary leader of the biggest governing party, the centre-right VVD, Klaas Dijkhof, “has called the abolition of the dividend tax a 'gamble'. The SP wouldn't like to gamble with €1.4 billion. We hadn't really expected it from this government or this minister either, but it fits nicely the image of casino capitalism that in 2008 brought our entire financial-economic system to the brink of the abyss and pushed the world into a deep and long recession. An economy which works for all of us is also an economy in which the economy serves society.

Van Apeldoorn hammered away at the government's plans to hammer the poor. Food and other essentials would become dearer as a result of the increase in VAT. “This of course has the greatest impact on those people who already find their daily shop so dear and who can allow themselves few luxuries.”

So these, he continued, drawing towards a close, “are the choices which this government is making: making necessities dearer while at the same time giving €1.4 billion away to the shareholders of multinationals and to foreign tax authorities, and all because Shell's and Unilever's bosses and their friends in the VNO-NCW” - the Dutch employers' body - “have been in conversation so often with the Prime Minister that he'll be feeling it right through every fibre of his being. What a mockery of our democracy. Is the government then surprised that people are losing their faith in democracy?”

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