Schoof’s Cabinet’s Mock Transformation — Opportunities and Constraints for a Sustainable Future
Dutch society faces the challenge of green growth and broad prosperity. The Schoof administration presented its coalition programme on 13 September 2024 with a number of striking changes in areas such as energy transition, housing, healthcare and the labour market. While these plans seem ambitious, we have to ask whether they will really lead to the necessary social changes. When we put the proposed legislation and investments side by side with practice, the question remains whether the impact will actually be as big as hoped. This opinion piece builds on my earlier plea for innovation maturity and takes a critical look at the reality of the new coalition programme.
Nuclear over climate?
A risky deviation from European directives
The energy transition is a crucial issue for the Netherlands and Europe. The Schoof administration is making a striking choice by putting nuclear energy at the heart of making energy supply more sustainable, with €9.5 billion to build two new nuclear power plants. At the same time, support for renewable energy sources, such as solar power, is being scaled back, evidenced by the planned abolition of the net-metering regulation for small-scale consumers.
Although nuclear power can contribute to CO2 reduction in the long term, it is not a quick fix. Building nuclear power plants is a lengthy process, and any benefits will only become apparent many years from now. Moreover, this choice ignores the need to bet on innovations such as battery storage and hydrogen, which can play a crucial role precisely in the short term. The phasing out of the energy-saving scheme discourages small-scale sustainability, which will slow down the broader energy transition.
Municipalities in trouble
The ravine years and limited housing ambitions
The housing market has been in crisis for years, and the Schoof administration is trying to solve the problems by releasing €2.5 billion to accelerate housing construction. This seems like a significant investment, but relative to the huge deficits in the housing market, it is a mere drop in the ocean. Municipalities, already under severe financial pressure due to the so-called ‘ravin years’, are expected to deliver these housing projects, but simply do not have the resources to do so effectively.
The Bill on Strengthening Public Housing Direction puts more responsibility on municipalities, but without additional structural funding, they will continue to struggle to build affordable housing. The focus on procedural acceleration is welcome, but implementation will remain difficult without sufficient local resources and capacity. This will limit the societal impact to a few projects, while not addressing the broader problem of housing shortage.
Healthcare renewal
Between short-term gains and long-term problems
In the healthcare sector, the Schoof government is proposing some radical changes, such as halving the personal deductible to €165 from 2027. This may provide short-term relief for households, but the question remains how this reduction will be financed. There is a risk that the costs will be offset elsewhere in the healthcare system, for instance through cuts in other healthcare services.
In addition, the government is introducing budget funding for acute care, which should ensure better coordination and accessibility. While this change may have a positive long-term impact on the efficiency and availability of care, it requires a fundamental restructuring of healthcare financing. It remains uncertain whether the healthcare sector has sufficient capacity and resources to successfully implement this reform in the short term.
Labour market and innovation
Missed opportunity for structural reforms
In the labour market, some measures are aimed at increasing productivity and attracting international talent, such as the tightening of the knowledge migrant scheme. This measure can be introduced quickly and offers short-term relief in sectors with labour shortages, such as engineering and green jobs. However, the €30 million investment in making business parks more sustainable is modest given the broader challenges.
The absence of policies aimed at labour-saving innovations, such as automation and digitalisation, which could actually contribute to the future resilience of the labour market, is striking. Technological innovations such as robotics, AI and automation can dramatically increase productivity while reducing dependence on labour. Social innovations leading to more efficient work organisation and new ways of working, such as platform economies and remote working, are also insufficiently mentioned.
The labour market continues to face structural problems, such as ageing and flexibilisation, which are insufficiently addressed in this programme. The focus is mainly on increasing productivity, but without innovative labour-saving measures that can change the future of work, the coalition programme misses a crucial component. This misses an important opportunity to make the Dutch labour market more robust and future-proof.
Realistic expectations or mock innovation?
The proposed measures in the Schoof administration’s coalition programme contain a mix of immediate impact and long-term projects, but many of them will take longer than expected. Investments in nuclear power and housing are significant, but their realisation depends on complex implementation processes and structural capacity problems. In the short term, measures such as the reduction of deductibles and the knowledge migrant scheme may provide some relief, but they lack fundamental changes necessary to address today’s major societal challenges.
Why broad-based vision and action perspectives are crucial
In the current phase of transition in which the Netherlands finds itself, developing a broad-based vision and action perspectives is crucial. A vision provides direction and ensures that all stakeholders - citizens, businesses, governments, and civil society organisations - know where we want to go as a society. This is essential not only to achieve long-term goals, but also to take coherent and effective steps in the short term. The absence of such a vision makes policy choices arbitrary and can lead to ineffective, fragmented measures without coherence or support.
For the themes I've highlighted - energy transition, housing, healthcare and the labour market - a clear vision is all the more important.
Energy transition: no sustainable future without a vision
The energy transition requires a coherent strategy that embraces not only big projects such as nuclear power, but also small-scale initiatives such as rooftop solar and household energy storage. Without a vision, we risk the energy transition stagnating and the Netherlands falling behind in the global race towards sustainability.
Housing: a long-term vision for sustainable and affordable housing
Without a clear vision for the future of housing and building, we will remain stuck in a reactive approach where ad hoc solutions are devised to deal with temporary crises. A vision must go beyond eliminating the housing shortage; it must be about creating sustainable, liveable communities.
Care: Prevention and innovation require vision and collaboration
A vision for care must look beyond financing and focus on prevention, innovation and digitalisation. Without a broad-based vision, we risk innovations being introduced piecemeal, without meaningfully contributing to a more sustainable care system.
Labour market: vision of the future of work and diversification
A vision for the labour market should focus on job diversification, new job creation in emerging sectors such as the green economy and technological innovation. This requires investment in training, but also a new way of thinking about work, with jobs becoming more flexible, sustainable and inclusive.
Constructive opinions for more short-term impact and sustainable innovation power
For the proposed measures to make more impact, both short-term and long-term targeted interventions that encourage diversification and innovation need to be deployed:
- Energy transition: Encourage small-scale solar power by phasing out the net-metering scheme and combining it with subsidies for battery storage and energy management systems. In addition, accelerate the development of hydrogen and battery infrastructure by intensifying public-private partnerships.
- Residential construction: accelerate the adoption of modular and circular construction techniques to reduce construction time and costs. In addition, invest in regional innovation hubs where companies, knowledge institutions and local authorities work together to realise sustainable construction projects.
- Healthcare: Roll out digital care models such as e-health faster to ease the pressure on care institutions and stimulate preventive care. In addition, cooperation between public and private healthcare organisations can lead to innovative solutions in healthcare.
- Labour market: Encourage short, flexible training in engineering and green sectors to train staff quickly. Furthermore, regional innovation centres can help redevelop business parks and create new jobs.
Conclusion
Without structural solutions, real transformation stays out
The Schoof administration’s coalition programme presents some ambitious plans, but many of them are mainly long-term in nature. In many cases, they lack the depth and power of change to realise substantial societal impact in the short term. Green growth and broad prosperity require not only major investments, but also a fundamental review of the way the Netherlands organises its energy transition, housing, healthcare and labour market.
To achieve true innovation maturity, we need to ensure that both national and local actors have the resources and support to realise a sustainable future. In the absence of such structural reforms, the risk remains that the promised transformations will be nothing more than sham innovation.
