Last Tuesday, the Dutch cabinet presented a perspective on stability and fiscal discipline with its Budget Memorandum 2025, but falls seriously short of addressing the structural challenges that the Netherlands will face now and in the near future from a transition perspective. Unfortunately, I see an imbalance between the budget plans and the necessary transformations and transitions in the areas of human capital, healthcare, housing and climate, environment and energy transition in our society.
The government is not just a market corrector; it must also be a market creator. This means that the government does not passively wait and see, but actively guides innovation and transitions in sectors such as healthcare, education and energy through long-term investments. Such an approach would enable the Netherlands to further develop a knowledge economy and adapt to future labour market challenges.
The opinion of the Council of State (RvS) supports my concern and shows that the Netherlands runs the risk of being left behind if we stick to short-term solutions. Moreover, the Social and Cultural Planning Agency (SCP) provides a sharp analysis of the Budget Memorandum and confirms my earlier concerns about the government’s lack of long-term vision. With this opinion piece, I hope to contribute to the broad social dialogue that has emerged to achieve deeper reflection and concrete recommendations.
Human Capital
False solutions and blind spots
The labour market shortage is recognised in the Budget Memorandum, but as the RvS emphasises, the approach remains superficial. The focus is on short-term solutions such as tax cuts and increasing working hours, while the underlying causes, such as the mismatch between skills and labour market demand, necessary labour market flexibility and training, are insufficiently addressed. The gap of ‘have and have-nots’ is thus further widened and exacerbated with a growing gap of ‘can and can-nots’.
The SCP confirms this analysis by pointing out the lack of attention to the long-term development of Human Capital, especially in sectors such as practical education and innovation. While these essential social pillars for the future are neglected in the present, short-term measures that temporarily support purchasing power are taken. The policy focuses too much on short-term financial perceptions and does not offer structural smart and participatory solutions to deeper labour market challenges. This is a missed opportunity to strengthen Human Capital and thus the self-regulatory capacity of the Dutch.
Inequalities undermine the potential present among Dutch people to be successful now and later, and to deploy their skills for an economy driven by meaning and broad prosperity.
Despite the importance of a knowledge economy, as also mentioned in the Budget Memorandum, insufficient attention is paid by the government to Working, Innovating and Learning in ‘Learning Communities’. These partnerships are essential to close the knowledge and skills gap and accelerate innovations, but the necessary structural support is lacking. The RvS underlines the need for better alignment between the labour market and education. At the same time, we know that the way to tackle complex social issues is through these learning and innovation ecosystems. The SCP adds that structural inequalities in education and opportunity are not addressed by current policies. These inequalities undermine the potential present among Dutch people to be successful now and later, and to deploy their skills for an economy driven by meaning and broad prosperity.
The potential of Learning Communities remains insufficiently exploited by politicians in their plans, and there is no clear transition and transformation policy that structurally supports them. This limits the necessary acceleration their contribution to innovation and economic growth. Innovation is the implementation of a new idea and/or pattern-breaking solution. The government stays too much at a distance and, as a result of free-market thinking, shuns possible interference in the market through state support. At the same time, it is precisely the government that can break patterns from the national interest and broad welfare perspective. This role shift from merely a legitimate and performing government to also the networking and participating government is insufficiently recognised and appreciated by cabinet Schoof. This while the Netherlands School for Public Administration (NSOB) has provided ample insights for it.
My recommendation is therefore, invest substantially in national programmes for upskilling and retraining and increasing knowledge and skills creation/circulation/adoption, focusing on sectors such as engineering, healthcare, living environment and sustainability. And link these programmes inter- and trans-disciplinary to achieve new approaches and synergy benefits. In doing so, focus especially on the integral removal of obstacles that to date still prevent current initiatives from scaling up sufficiently in maturity. Do this from the perspective of regional networks, Learning Communities, in which companies, education, government, society and ecology interest groups work together; and make sure they have a central place in this strategy.
Although the number of regional collaborations is growing, too often they are still reinventing the wheel. While all these Learning Communities are going through a similar process in growth towards innovation maturity. Supporting and facilitating the various transition and underlying transformation issues is crucial here. Come up with a long-term innovation strategy and take example from the HCA top sectors policy. Provided an innovation agenda is taken up strategically and practically, it offers opportunities to develop from a knowledge economy into a learning and innovating significance economy, which can increase the problem-solving and adaptive capacity as well as the innovation strength of the Netherlands.
Innovating via the path of Learning Communities, in which public-private partnerships are facilitated inter- and transdisciplinary should be given a structural place within government policy. Free up structural funding for these PPP networks and develop policy frameworks that encourage far-reaching cooperation. This can remove obstacles for SMEs in particular that are more vulnerable and enable us to respond to the ever faster changing demands of the labour market and society at large.
Energy transition
Much Promise, Little Urgency
Energy transition is a central pillar in both the coalition agreement and the Budget Memorandum. Yet the necessary urgency is lacking in the current policy, which mainly focuses on long-term solutions/realisations such as nuclear power. The RvS stresses that the shortage of professionals and the slow implementation of innovative solutions such as battery storage and smart energy networks are endangering the energy transition. While it is precisely local Energy hubs and local ownership that offer pattern-breaking solutions and can accelerate the energy transition in an inclusive and equitable manner.
The focus on long-term solutions ignores opportunities for short-term impact, wasting precious time in the fight against climate change and negative impacts on the environment and ecology.
The government should proactively reform energy infrastructure by taking risks where the private sector does not. This can be done through substantial state support for innovative projects such as battery storage and smart energy grids, which are necessary for a successful energy transition. Such investments help accelerate the transition and support local, equitable energy initiatives.
The SCP is also critical of the choices made on climate and nature. While climate targets are set for 2030, necessary investments, such as the Rural Area Transition Fund, are scrapped. As a result, the government is shifting responsibilities to future generations without taking the necessary steps now.
The focus on long-term solutions ignores opportunities for short-term impact, wasting precious time in the fight against climate change and negative impacts on the environment and ecology. The SCP confirms this by pointing out the cabinet’s deferred responsibility.
From my perspective, the cabinet should shift its focus to readily available technologies such as renewables, battery storage and smart energy networks. The energy transition requires social innovations right now in addition to technological ones. There should be targeted support programmes for regional and local initiatives to support energy justice and let financial returns flow back into local communities. Only then can the energy transition be implemented equitably with the necessary speed. At the same time, long-term solutions need to be worked on as incorporated in the vision of the National Energy System Plan 2050, which will soon be replaced for a new plan.
Housing
Ambitions Collide with Reality
The government has set a target of building 100,000 new homes a year, but the RvS makes it clear that these targets are unachievable without substantial reforms in the construction sector. Municipalities are financially trapped by the so-called ‘ravine years’, and there is a shortage of skilled workers to realise housing ambitions.
The SCP concurs and questions the feasibility of these housing plans due to staff shortages and legal obstacles . Moreover, the emphasis on quantity threatens to come at the expense of the quality of the living environment, with nature conservation and spatial planning being compromised. The SCP warns that although ambitious goals have been set on paper, the practical feasibility of these plans is severely limited by structural problems in the labour market and within the construction sector. Moreover, I see in practice that issues of climate adaptation and mitigation, restoration of biodiversity, circularity in the construction sector are not yet getting off the ground sufficiently.
The ambitions are too high for the available resources and capacity. As a result, housing construction is lagging behind, further exacerbating the crisis. Moreover, the focus on quantity risks harming the quality of spatial planning, the health of the living environment and ecology.
From my perspective, the government should encourage modular and circular construction methods to accelerate housing construction that integrates the aforementioned sustainability measures. However, this requires a different view on municipal performance agreements, environmental plans, subsidy and funding models that incorporate long-term social cost-benefit analysis. For this, municipalities need financial support to realise these ambitions. Municipalities are now reluctant to impose integral sustainability requirements in their environmental visions and plans, because they have long been happy to build and face risks of higher house prices and rental charges due to the narrow view of costs and benefits. Structural reforms of the construction sector for both housing and industry are urgently needed to meet targets, as both the RvS and the SCP emphasise. It is time for politicians to be well informed about transition and transformation opportunities and the adaptive policy frameworks needed for this and their own role as a participating government.
Healthcare
Structural Problems Are Not Addressed
Although the reduction of the deductible for care users in the Budget Memorandum offers some relief, the RvS points out that the fundamental problems in the care sector remain. Staff shortages, rising costs and an ageing population require a long-term solution that goes beyond short-term measures such as reducing the deductible.
The SCP is highly critical of this: ‘although on paper the government has an ambition to reduce health inequalities, it lacks concrete measures. The ageing population and rising demand for care are insufficiently addressed, and the policy does not offer structural solutions to the challenges facing the care sector.’ The focus on temporary relief ignores the structural challenges of the current healthcare system. The SCP confirms that there is a lack of long-term strategy, especially in the areas of prevention and digitalisation.
My advice is therefore to focus on a strategy in which preventive care, the use of the frontline and digitalisation are central.
E-health solutions can contribute to more efficient and people-centred care processes, while preventive care starting in the front-line field of the social domain can reduce costs in the long term. The healthcare sector needs structural reforms to become future-proof. Adjust the costing system of care so that it contributes to a substantially lower administrative and personnel burden for care professionals.
Targeted integral and more holistic analyses and treatments offer solutions for preventive and corrective care instead of curative care that addresses problems afterwards. This approach can simultaneously ensure that unnecessary bureaucracy, unnecessary process costs and unnecessarily long lines can be avoided which does not add value to us as Dutch citizens. Inter- and trans-disciplinary analyses and treatment programmes prevent people from being sent from pillar to post and reduce the pressure on specialist care and thus staff deployment. Lifestyle medicine is a good example of such an integrated approach.
A participating government creates public value by actively participating in innovations. Instead of limiting itself to short-term policies and market correction, the government should embrace its role as a market-creating actor.
Investments in preventive exercise and sports programmes also reduce the risk of disease. Normalising instead of medicalising increases people’s awareness and self-regulating ability and reduces medication and healthcare costs. Actively work on restoring a healthy food system without waste. And set higher taxes on unhealthy hyper-processed food and reduce the tax burden on healthy food, increase taxes on unhealthy food and introduce true pricing. This will bend the behaviour of the Dutch to move towards a more affordable and healthy lifestyle. This then increases the broader societal health effects.
A participating government creates public value by actively participating in innovations. Instead of limiting itself to short-term policies and market correction, the government should embrace its role as a market-creating actor. This requires it to actively invest in public goods, such as healthcare, education and infrastructure, and collaborate with the private sector to deliver long-term innovations. As this requires an approach based on fundamental ‘design on first principles’, a long-term vision and pattern-breaking measures, this again requires a government with a clear mission and vision.
Climate and environment
Insufficient Urgency and Outlook
The SCP is concerned about declining investments in climate and nature, especially with the reduction of the CO2 tax and the scrapping of the Rural Area Transition Fund. Despite the climate targets set for 2030, the government’s measures fall far short of what is needed to meet them. This undermines the credibility of climate policy and shifts responsibility to future generations.
The RvS confirms these concerns by pointing out that current measures are insufficient to meet climate targets. The lack of investment and decisiveness delays the progress of the energy transition and complicates the necessary steps towards sustainability. The government’s climate policy shows a lack of urgency and long-term investment. And shifting responsibilities to future generations undermines the feasibility of the 2030 climate goals.
The government must therefore put more effort into structural climate and environment measures, such as investments in renewable energy, nature and biodiversity restoration and emission reductions. This too requires a clear vision, as well as substantial financial resources to guarantee the long-term goals. As both the RvS and the SCP point out, the focus should not be on postponement, but on immediate action.
Structural reforms needed for sustainable future
The 2025 Budget Memorandum and the Schoof administration’s coalition agreement lack the vision and urgency needed to prepare the Netherlands for the future now. Both the Council of State and the Social Cultural Planning Bureau have expressed concerns about the lack of structural reforms and too much focus on short-term measures. Policy focuses too much on temporary relief, while structural challenges — such as climate change, healthcare costs, housing shortages and inequality — persist and even worsen.
The long-term strategy the Netherlands needs must focus on broad prosperity. This means that economic growth should not only be measured in financial terms, but also in social and environmental value. The cabinet should invest more in public goods, such as healthcare, education, and the energy transition, that contribute to the well-being of future generations.
With this, the cabinet should not only focus on fiscal discipline and narrow financial economic models, but also dare to invest in the long-term solutions that are pattern-breaking. Human capital, innovation, social cohesion and sustainability must be at the heart of our policies. By making the right choices now, we can future-proof the Netherlands and ensure broad prosperity, not only for the current generation, but also for future generations. The SCP and the Council of State have made it clear that short-term measures are insufficient to solve the deeper structural problems in the Netherlands. It is essential that the government dares to invest in the long term, with a clear mission and vision for broad prosperity, sustainability and social cohesion. Here lies the key to a sustainable and inclusive future.
Recommendations
Human capital and lifelong development
Invest in flexible national programmes for further and retraining, especially focused on technology, care and sustainability, to better serve the future labour market. Learning Communities should play a crucial and driving role in this strategy to strengthen the knowledge and skills economy.
Social inequality and cohesion
Take concrete steps to address income and health inequalities in an integral and preventive way. The absence of structural measures to reduce these inequalities undermines social cohesion and the long-term stability of society.
Housing
Realise housing ambitions by encouraging innovative construction and working methods such as modular labour-saving circular construction. Moreover, the government should support municipalities with structural funds to cope with the ‘ravine years’ and accelerate housing construction;
Healthcare
Reform the care and welfare sector by focusing on prevention, digitalisation and e-health. The healthcare system must be adjusted to cope with an ageing population and increasing demand for care, not just through temporary relief, but through structural reforms through diversification and innovation.
Climate and nature
Commit immediately to robust climate and environment measures and increase investment in emission reductions, nature restoration and renewable energy. This requires a clear long-term vision and should not be passed on to future cabinets.
It is clear that the Netherlands is at a crossroads. Cabinet Schoof can learn that choices we make today will determine how future-proof our society, economy and broad prosperity are.
With the insights of the Social Cultural Planning Bureau and the State Council in mind, it becomes clear once again that current policies are not enough to address tomorrow’s challenges. If we want to achieve a sustainable, inclusive and equitable future, we must act now. It is time for a long-term strategy that puts innovation, social cohesion and sustainability at the centre with pattern-breaking measures in the here and now.