The Netherlands is a country that is known for being a welfare state. It is evident with the statistics results- it is having one of the lowest income inequality in the European Union (EU). Several benefits are provided to the citizens so that they could live a respectable livelihood. However, things started deteriorating due to the child care subsidies scandal that hit the country at the beginning of the year. It eventually resulted in the government’s collective resignation as the Dutch Prime Minister Mark Rutte and the entire cabinet resigned on January 15, 2021. Mark Rutte was one of the longest-serving leaders in the world. [1]
Earlier, Prime Minister Mark Rutte was against the decision of resigning and subsequently dissolving the coalition government. He insisted that there is a need to have political stability in the wake of the pandemic. However, the coalition parties believed that a political backfire was bound to happen, and the consequences were unavoidable after the release of the parliamentary report. [2]
It was only after this that in a press conference the Prime Minister said: “We are of one mind that if the whole system has failed, we all must take responsibility, and that has led to the conclusion that I have just offered the king, the resignation of the entire Cabinet.” [3]
With this statement, he confirmed that he and his government take full responsibility for the scandal and submit their resignation to King Willem-Alexander van Oranje. [4]
At the same time, he reaffirmed that although he has resigned, he will play the role of the government’s role until the next general elections scheduled on March 17 this year. As per many political experts, there is a likely shift to the Dutch social policy left after this scandal. Nonetheless, one cannot deny that respite the resignation, and the Prime Minister has instead been able to escape relatively untouched successfully.
What Is the Child Benefits Scandal?
In the Netherlands, childcare is private. Under the tax department’s earlier policies, parents had to pay for childcare, but they did get subsidies that depended on their income. However, after Mark Rutte took over as the Prime Minister in 2010, several changes were made to the anti-benefit fraud laws. These measures were further taken in 2013 after authorities reported illegal methods used by Bulgarian crooks to collect such payments. [5]
With the policies’ changes, the tax department was given more power to make sure that such misuse of benefits does not occur. Also, this allowed the tax department to compensate for the seized funds.
However, things soon started going downhill when the negatives of these laws started impacting the Dutch citizens. Several parents lost both benefits and were further asked by the authorities to repay the child benefits that they had received in the past. It affected over 26,000 families, of which 10,000 households were forced to repay benefits. It led to bankruptcies, divorces and unemployment among those people. [6] Even when the citizens contacted the authorities with their grievances, there was no genuine response. [7]
These complaints soon started piling up and finally in 2017, the government-appointed an official to look into these complaints. On a thorough check, it was observed that a disproportionate number were of immigrant parents who lost the child benefits. When the need for further information was required for evidence gathering, the parliamentary inquires got only a little information from the ministries with most of the information blacked out. However, one thing was exact, and civil servants had cut child benefits to families from 2013 to 2019. [8]
By the end of 2019, an estimated amount of € 500 million, about €30,000 ($36,300) for each family was set aside. [9] Also, the current scheme was decided to be expanded. and expanded compensation was set aside when the government accepted its mistake, although payments were not made. [10]
The final nail in the coffin was the parliamentary report, [11] that brought out the government had falsely accused several parents of tax defrauding. It is a grave injustice done to the people of the Netherlands. In a separate investigation, the Dutch Data Protection Authority concluded that tax inspectors had discriminated against citizens with dual nationality. [12]
In November, a report [13] ranked the Netherlands government is considered a leading global tax haven for large corporations. So the government chasing the individuals for such small amounts thus did not go unnoticed.
Families Reaction to This Scandal
Several families have been affected by these mishaps on the government’s side. So, they are suing the government. Ornaldo Kadir is an attorney who is currently representing over 600 families stated that it was predominantly immigrant Dutch citizens that were target due to the method of ethnic profiling. It used a particular algorithm that characterized immigrant dutch citizens of dual nationals to be a fraudster. Not only that, but even missing signatures were considered as a parameter by the tax authorities to brand the people as frauds. It was not only an injustice but also a violation of the constitution. [14]
Way Ahead
Several ministers such as Health Minister Tamara Van Ark, Finance Minister Wopke Hoekstra, and former Tax Minister Menno Snel and opposition Labour Party leader Lodewijk Asscher have been named court documents.
The Leader of the Opposition Labour Party, Lodewijk Asscher who held the Social Affairs Minister, office from 2012-2017 has also stepped down from his current position due to the “unheard justice” done to people the Netherlands. It was his resignation that forced Prime Minister Mark Rutte to revisit his position on the issue. Eric Wiebes, Economic Affairs Minister, also resigned and stated that he would not be a part of the current guardian government. [15]
With the general elections scheduled in March, the current child benefits scandal is likely to significantly less impact Prime Minister Mark Rutte’s popularity. According to polls, it is expected that his People’s Party for Freedom and Democracy is likely to win a fourth term if he gets the largest share of votes. In other words, Mark Rutte’s VVD party is ahead of the far-right leader Geert Wilders’s party. If he wins, Prime Minister Mark Rutte would continue as the government’s head by forming a new coalition. [16]
With this scandal, the Netherlands in the third European country to be caught up in a political crisis. Earlier, Prime Minister, Giuseppe Conte had to resign due to falling in the majority after their coalition party led by Renzi backed out and also the government in Estonia had to resign due to a corruption scandal.
References
[1] Erdbrink, Thomas. “Playing by the Rules: Dutch Leader Offers a Sober Contrast in a Brash Era.” The New York Times, The New York Times, 2 June 2020, www.nytimes.com/2020/05/28/world/europe/rutte-dutch-netherlands.html.
[2] Schaart, Eline. Mark Rutte Pulls Plug on Dutch Government, PLANS Immediate Return. 15 Jan. 2021, www.politico.eu/article/dutch-government-resigns-over-childcare-benefit-scandal/.
[3] Press, Associated. “Dutch Prime Minister Mark Rutte and His Entire Cabinet Resign over Child Welfare Scandal.” Free Press Journal, 15 Jan. 2021, www.freepressjournal.in/world/dutch-prime-minister-mark-rutte-and-his-entire-cabinet-resign-over-child-welfare-scandal.
[4] “Dutch PM Mark Rutte and His Entire Cabinet Quits over Welfare Scandal.” Hindustan Times, 17 Jan. 2021, www.hindustantimes.com/world-news/dutch-pm-mark-rutte-and-his-entire-cabinet-quits-over-welfare-scandal-101610900452800.html.
[5] “Netherlands Uncovers $120m ‘Bulgarian Fraud’ Benefits Scam.” BBC News, BBC, 25 June 2013, www.bbc.com/news/av/world-europe-23043543.
[6] “Dutch Government Resigns over Child Benefits Scandal.” The Guardian, Guardian News and Media, 15 Jan. 2021, www.theguardian.com/world/2021/jan/15/dutch-government-resigns-over-child-benefits-scandal.
[7] Berg, Stephanie van den. “Dutch Government Quits over ‘Colossal Stain’ of Tax Subsidy Scandal.” Reuters, Thomson Reuters, 15 Jan. 2021, www.reuters.com/article/us-netherlands-politics-resignation-idUSKBN29K1IO.
[8] Amaro, Silvia. “Dutch Government Resigns after Childcare Benefits Scandal.” CNBC, CNBC, 15 Jan. 2021, www.cnbc.com/2021/01/15/dutch-government-resigns-after-childcare-benefits-scandal-.html.
[9] “Dutch Rutte Government Resigns over Child Welfare Fraud Scandal.” BBC News, BBC, 15 Jan. 2021, www.bbc.com/news/world-europe-55674146.
[10] “Dutch Government Faces Collapse over Child Benefits Scandal.” The Guardian, Guardian News and Media, 14 Jan. 2021, www.theguardian.com/world/2021/jan/14/dutch-government-faces-collapse-over-child-benefits-scandal.
[12] Markus, Niels. “Belastingdienst Werkte Zeer Kritische Autoriteit Persoonsgegevens Tegen.” Trouw, 17 July 2020, www.trouw.nl/binnenland/belastingdienst-werkte-zeer-kritische-autoriteit-persoonsgegevens-tegen~b69beed9/.
[13] The State of Tax Justice: Tax Justice in the Time of COVID-19. Nov. 2020, The_State_of_Tax_Justice_2020_ENGLISH.pdf.
[14] “Dutch Government Quits over ‘Colossal Stain’ of Tax Subsidy Scandal.” Mint, 15 Jan. 2021, www.livemint.com/news/world/dutch-government-quits-over-colossal-stain-of-tax-subsidy-scandal-11610728718467.html.
[15] Kok, Laurens. DPG Media Privacy Gate, 14 Jan. 2021, www.ad.nl/dossier-vertrek-asscher/kabinetsval-dichterbij-blijven-zitten-terwijl-asscher-wel-zijn-conclusies-trekt-is-lastig-uitlegbaar~aff58082/.
[16] CBS News. “Dutch Prime Minister Mark Rutte and His Entire Cabinet Resign over Child Welfare Scandal.” CBS News, CBS Interactive, 15 Jan. 2021, www.cbsnews.com/news/dutch-government-cabinet-mark-rutte-resign-child-welfare-scandal/.
