1. What is the National Growth Fund again?
A pot of 20 billion euros with which the government will make a one-off investment between 2021 and 2025 in projects that should boost the Dutch economy. The National Growth Fund is also called the ‘Wopke-Wiebes Fund’ because it was established in 2020 by the then ministers Wopke Hoekstra (Finance, CDA) and Eric Wiebes (Economic Affairs and Climate, VVD).
Tomorrow, around 160 companies and institutions will meet in Amsterdam to pitch their project to the government. There is still approximately 8.2 billion euros in the investment fund.
2. In which projects has the fund already invested?
That varies enormously. For example, hundreds of millions were invested in green hydrogen and quantum computers in previous rounds. But also in the digitalization of education, training for the poorly educated and low-literate, new solar panels, photonic chips and the development of 6G technology. Just like in a new data infrastructure for healthcare and the establishment of the Einstein Telescope, an underground observatory for gravitational waves in South Limburg that should then attract high-tech companies from home and abroad.
Many of these projects do involve a conditional allocation of money. In that case, a proposal must first be ‘strengthened’ before the full amount is transferred. Or something goes wrong with the other financing of a project. For example, 1.5 billion euros has also been reserved from the National Growth Fund to contribute to the extension of the North-South line from Amsterdam South to Schiphol and Hoofddorp. But that metro project is now in jeopardy due to budget cuts.
3. What has caused discussion now?
The pot of the National Growth Fund is so large that politicians find it difficult to stay away from it. If political pressure becomes great in the short term, they may want to withdraw money from such a long-term investment fund.
Consider making the Western Scheldt tunnel toll-free early. That is a fervent wish among residents of Zeeland, who use it to cross the Western Scheldt to travel from Zeeuws-Vlaanderen to the rest of the Netherlands. Only there was not enough money available for that. After which a majority of the House of Representatives decided – in addition to a ‘reasonable contribution’ from the province of Zeeland – to also withdraw 140 million euros from the National Growth Fund. There was then joking talk in Parliament about the ‘grabbing fund’.
More recently there was great dissatisfaction about high fuel prices for motorists. To reduce this, the planned increase in fuel excise duties must be canceled as of January 1. But this requires around 1.2 billion euros (699 million for petrol and 545 million for diesel). And so a selection will also be made from the National Growth Fund for this purpose – although it is still unclear how much and when.
4. Why do critics think that is a bad idea?
This has consequences, for example, for education plans that have already been initiated. For example, money from the National Growth Fund has been reserved for the so-called National Education Lab AI, a project for the responsible use of artificial intelligence (think of chat robots ChatGPT and Google Bard) in education.
If there is no more money for scaling up that project, this means that the objectives cannot be achieved, Minister Robert Dijkgraaf (Education, Culture and Science, D66) warned last week. “For resources reserved for proposals that have yet to start, intended improvements for education cannot be achieved,” said Dijkgraaf, who points to the expectations that have been raised among those submitting proposals, including educational institutions.
Research institute TNO was also active, pointing out the need to continue investing in the Dutch high-tech industry. Putting an end to the National Growth Fund could cost the Netherlands the emergence of ‘new ASMLs’, warned TNO director Arnaud de Jong. “The danger is that it will expire in 2027 and then boil you dry. That would be a shame.”
5. Has this ‘grabbing’ of government funds happened before?
It appears to be a recurring ailment in The Hague. The Court of Audit has previously warned that money from government funds such as the National Growth Fund must be closely guarded against excessively easy expenditure that does not fit the purpose for which the money has been set aside. Especially when it is not properly recorded what the money can be spent on and there is no proper supervision. As happened in the past with the Economic Structure Enhancement Fund (FES), which was fully exploited.
“History seems to repeat itself at the start of the National Growth Fund,” wrote board member Barbara Joziasse. “There is something ironic that the instrument fund, which was precisely intended to provide protection against too-easy short-term cuts, is being used for this purpose. The political acrobatics allow a lot: substantial amounts have already been used from the Climate Fund and nitrogen fund before these funds have been used. set up.”