Council of State flags fiscal squeeze

The Dutch Council of State warned on April 14 that the government’s 2026 budget update is tightening fiscal room and risks pushing costs onto workers through higher disability-fund premiums. (raadvanstate.nl) In its spring fiscal report, the Council said the Netherlands still meets the European Union’s headline limits in 2025 and is expected to meet them in 2026: a deficit below 3% of gross domestic product and debt below 60%. It also said net spending growth for 2026 through 2028 is too high for the medium term. (raadvanstate.nl) The advice covers the 2026 Spring Memorandum, which the Dutch cabinet approved on March 27, and the new medium-term budget plan it must send to the European Commission. Finance Minister Eelco Heinen sent the report, with the cabinet’s response, to both houses of parliament on April 14. (raadvanstate.nl) (rijksoverheid.nl) The immediate flashpoint is the Arbeidsongeschiktheidsfonds, the disability fund financed by employer premiums that pay for incapacity benefits. Salaris Vanmorgen, citing the Council’s advice on the Spring Memorandum, reported that higher premiums could raise labour costs and reduce net pay. (salarisvanmorgen.nl) That warning lands as the first Spring Memorandum of the Jetten cabinet doubles as its Startnota, the document that sets spending and tax ceilings for the full term. The Council said budget margins for the coming years are smaller than in earlier cabinet periods. (rijksfinancien.nl) (raadvanstate.nl) The Council tied the squeeze to a stack of long-running pressures: ageing, a tight labour market, climate and energy spending, nitrogen and nature policy, housing shortages, and strained public services such as care and education. It said medium-term economic growth is expected to stay below 1% a year. (raadvanstate.nl 1) (raadvanstate.nl 2) The report also pressed ministers to preserve budget buffers, avoid accidental tax increases, and stop using underspending elsewhere in the budget as an easy source of cash for new plans. It separately called for a more precise approach to efficiency cuts in the spending ceiling. (raadvanstate.nl) On disability premiums themselves, the broader backdrop is already moving upward. The official 2026 rate-setting notice said the high Arbeidsongeschiktheidsfonds premium was set at 7.61% for compulsory insured workers, while payroll guidance for employers lists 2026 rates of 6.27% for small employers and 7.63% for medium and large employers. (officielebekendmakingen.nl) (loon.nl) The cabinet has not rejected the Council’s broader diagnosis; the government transmitted the advice together with its own response to parliament. The next test is whether ministers keep the burden-sharing balanced when they turn the Spring Memorandum into detailed tax and spending bills later this year. (rijksoverheid.nl)