Speech from the Throne 2004

The Hague, 21 September 2004

Members of the States General,

Confidence endows a society with resilience and dynamism.

Over the years, people and civil society in the Netherlands have proved that they can cope with major changes in the world and in our own society. Now we are again witnessing political, economic and social developments that affect us directly. That is why last year the Government presented an ambitious programme of reforms aimed at a stronger economy, a safer society, more effective government and a well-functioning democracy. In 2005 the implementation of these reforms will be well under way. In combination with the beginnings of economic recovery in our country, this is creating renewed confidence and fresh prospects.

A strong economy is essential for employment and prosperity. In an ageing society, pensions, care and other social programmes must be sustained by a smaller working population. This will put our solidarity to the test.

Rapid technological advances are imposing new demands on companies and their employees. The world economy is growing fast. Growth in the Netherlands is lagging behind, however. Accordingly, companies and employees must focus on the future and the structures of the Dutch economy must be strengthened. The Government therefore believes that pay restraint, increased labour force participation and measures to boost productivity are called for.

In the interests of achieving the pay restraint that is necessary, in 2004 and 2005 there can be no rise in public-sector salaries or in benefits, except the general old age pension (AOW). The Government calls on employers and employees in the private sector to emulate this restraint in the interests of jobs and of solidarity in income development. The Government will not take responsibility for obliging employers to implement wage rises.

In the coming year, restoring confidence in the economy will again require a contribution from everyone. However, the Government wishes to spare the most vulnerable groups in society as far as possible. There will therefore be increases in the general old age pension and in tax credits for the elderly and families with children.

To increase labour participation, people will have to re-enter the workforce and work longer hours. The new Work and Social Assistance Act has now entered into force and is producing good results. The Government will also propose a new invalidity insurance (WAO) scheme centring on fitness for work and reintegrating employees. Incentives to find paid work should play a leading role in unemployment benefit schemes. Provision for training will remain intact. Redundancy payments and benefits exceeding the statutory minimum will be deducted from unemployment benefit. To stimulate economic growth and ensure a sufficient supply of labour in the future, the Government intends to encourage people to work longer hours. However, whether people ultimately work longer or shorter hours will still be their personal choice.

The Government will propose eliminating the tax advantages of early retirement with effect from 1 January 2006. Since it is aware that this is causing uncertainty among older workers, the proposals contain appropriate transitional provisions. Also in 2006, the Government intends to introduce the life-course savings scheme, enabling employees to save in order to balance work with care, training and leave.

All these measures will strike a balance between three objectives: increasing labour participation, cushioning the impact on older employees and limiting the burden on younger workers in the future.

Education, research, knowledge and innovation are essential to the productivity of the Dutch economy. Unnecessary rules will be abolished in the field of education, so that schools and universities have more scope to develop initiatives and to raise standards. Higher education establishments will be permitted to experiment with selective admission and with differentiated tuition fees. Schools will be given more resources for science and technical subjects.

The Innovation Platform has made proposals to improve the conversion of knowledge into products and services. The Government is adopting certain specific recommendations made by the Innovation Platform: simplifying the admission of "knowledge migrants", improving exchanges between universities and research institutes on the one hand and small and medium-sized enterprises on the other, increasing the number of start-ups, and taking advantage of the opportunities offered by the creative industry.

Reducing the tax on company profits will improve the attractiveness of the Netherlands as a business location and thereby improve our economic system. Expediting procedures for spatial planning, housing, infrastructure and the environment will also stimulate economic productivity. The Government wants strong towns and cities with space for living, working and recreation, as well as space for nature and the landscape.

A more flexible rent policy will foster new investment in housing construction, partly to encourage people to move up the housing ladder. The revision of the Spatial Planning Act will give municipalities and provinces more room to manoeuvre.

In 2005 the Government will put forward proposals designed to improve the quality of life and vitality of rural areas.

Major investments will be made in infrastructure, particularly in road maintenance and more efficient road use.

The Netherlands will abide by international agreements on reductions in greenhouse gas emissions.

Improving security will increase public confidence in the future. Throughout the world groups of fanatics are attempting to undermine societies by committing acts of terror, whose victims are innocent people - and even children. The Netherlands is not immune to such threats. The Government has announced that it will take far-reaching measures in the near future to protect our democracy, the rule of law and our diverse society. The campaign against terrorism will be stepped up through organisational improvements, the option of expediting measures, and extending certain investigative powers. In addition, in the interests of appropriate public information, an early warning and alarm system will be introduced.

The work of the Government, municipalities, regional police forces, the judiciary, the public prosecution service and the prison service is beginning to bear fruit. Municipalities will have greater authority to impose administrative fines for petty crimes and parking offences.

Next year we will commemorate the sixtieth anniversary of the end of the Second World War. To foster peace and security, countries must continue to bear joint responsibility for the international legal order and global solidarity. In the Netherlands' view, the basis for this is a decisive European Union, a strong transatlantic relationship, especially within NATO, and an effective United Nations.

Through an active foreign policy and with more than 2,000 troops taking part in international missions, the Netherlands is supporting democratic and economic reconstruction in Iraq, Afghanistan and the Balkans. The men and women of our armed forces who take part in these operations deserve profound respect and gratitude. The Government feels a bond with them and their loved ones; our thoughts are above all with the wounded and the fallen Dutch military personnel and their families.

The international legal order and global solidarity demand an equally untiring campaign against poverty and injustice. The hallmarks of Dutch development cooperation are partnership, dialogue and involvement by non-governmental organisations and the private sector. The Government will maintain its special emphasis on education, the environment and water, health care and the fight against AIDS. A particular concern of the Government's is the development of the poorest continent, Africa, and the grave crisis in Sudan. A large portion of Dutch bilateral aid is earmarked for sub-Saharan Africa.

Promoting trade with developing countries encourages their economic growth. The World Trade Organisation and the European Union have recently taken major steps to give this process new momentum.

This is a year of new milestones for the European Union: the accession of ten new member states and the Constitutional Treaty, which will be signed next month. The Government will work to make it clear to everyone that the EU means more than just economic cooperation. This is vital for ensuring public confidence in the EU.

Within the European Union, it is essential to fulfil pledges in the areas of security and migration, agricultural reform, the internal market, competition, budgetary policy and economic reform. The Dutch Presidency has a weighty responsibility to do careful preparatory work for decisions on the further enlargement of the EU, in the awareness that public support is indispensable. To this end, the pre-established criteria for accession must be strictly applied.

Renewed public confidence must also be rooted in social cohesion. The Government cannot bring that about on its own. It is individuals, civil society organisations and the social partners that shape Dutch society. The Government recognises the important role of art and culture in this regard. In the area of work and income, employees and employers should have the freedom to introduce new accents. The specific role of the social partners in this context is not under discussion.

The policy of deregulation and reducing the administrative burden for businesses and individuals is taking shape. This will create scope for greater personal responsibility.

To maintain a high-quality, accessible care system, the Government will promote free choice and competition. Care insurance and care providers will be encouraged to deliver better quality and to work more efficiently. A bill is being drafted to establish a single care insurance scheme for all, along with a care allowance.

The public sector will be more selective in its ambitions and priorities and thereby achieve better results. The action programme Changing Government will present proposals for rethinking the responsibilities and working methods of national government and improving public services.

The work of government should take place as close as possible to the public. This will make more demands of provincial and municipal authorities. The Government emphasises the importance of careful consultation between public authorities at different levels and will continue to pursue that course energetically in the interests of coherent public administration.

To a large extent, cities are the social and economic engines of our society. The Government supports them by agreeing on specific commitments.

Strengthening democracy can lift public confidence in government. The Government has proposed that mayors should be directly elected from 2006 onwards. In the near future, you will receive bills for electoral reform, aimed at strengthening the mandate of individual elected representatives.

Living side by side in a society demands respect for one another's culture, background and views. In this country many of us, in our own personal ways, belong to a religious or secular tradition, be it Christianity, humanism, Judaism, Islam or another. In a diverse country like ours, all of us, whether of Dutch or foreign ancestry, must respect our fundamental rights and the rule of law. A common foundation of language, active citizenship and shared norms and values can strengthen that respect. Integration policy, too, has a role to play. The number of incoming asylum seekers has dropped steeply. The restrictive admissions policy for asylum seekers and those who come to the Netherlands to form a family will continue.

The Government plans to work on mutual confidence within our Kingdom. The Netherlands has a unique constitutional and social bond with Aruba and the Netherlands Antilles. The Government will go on providing strong support to the Netherlands Antilles, to make it possible to tackle the troubling social and economic situation and fight rising crime. Reform of governmental and financial structures in the Netherlands Antilles and the future of the Kingdom's institutional structures are other points that require attention. In December, we will celebrate the 50th anniversary of the Kingdom Charter together.

Members of the States General,

The Government is aware that it is asking for major efforts from every part of society again in 2005. Against a backdrop of robust international growth and the upturn in Europe's economy, our country too is beginning to show signs of recovery. Employment is expected to rise again somewhat next year. This turning point is an opportunity to make economic growth stronger and more durable. The structural reforms being undertaken are directed at that goal. They open up new prospects of prosperity and employment and hence greater social cohesion. By making the required effort together, we can face the future with confidence.

The Government is counting on a productive dialogue with you. You have a responsible and difficult task. You may draw succour from the knowledge that many are wishing you wisdom and join me in praying for strength and God's blessing upon you.

Tuesday, 21 September 2004