Elections Due as Dutch cabinets breaks over austerity measures

Major austerity talks between the three political parties VVD, CDA and PVV broke down this afternoon, with the PVV stepping out of the negotiations. Effectively this means the Dutch government will fall and new elections will be called. In the course of Saturday afternoon, details emerged of exactly how the Dutch government was planning to save a further €14.2 billion off the annual budget. If it collapses, the non controversial plans will probably go through as planned. I'm guessing that means overseas development aid and further cuts to public service broadcasting will now go ahead. 


Overseas Development Aid - Further Cuts

Dutch Ministry of Foreign Affairs

The VVD and PVV parties both believe that The Netherlands should reduce the money they set aside they current give in overseas development aid. In September 2010, the Dutch government announced its intention to reduce the budget for overseas development aid from 0.8 to 0.7% of the GNP. Effectively, this meant going from an annual budget €4.78 billion down to €4.6 billion, a saving of some €1.9 billion.  


Today, the documents from the failed austerity measures indicate that the other party in the minority cabinet, the CDA, had apparently agreed to a further reduction of €0.5 billion in 2013, rising to €0.75 billion in 2014 and 2015. CDA has been the lone voice defending Overseas Development Aid. 


It is unclear what this would mean to the proposed budget of €14 million for Radio Netherlands Worldwide, which is to be taken away from the Ministry of Culture and put under the Ministry of Foreign Affairs. If the budgets are simply adjusted downwards proportionally, then the best case would mean a further budget reduction to something like €11.8 million a year. 


But the surprise resignation of the Radio Netherlands Worldwide Editor-in-Chief Rik Rensen and his deputy on Friday, as well as news that the departing Director General could receive a golden handshake of up to €1 million have made the future of Radio Nederland Wereldomroep in any form a lot more uncertain. If the top management are bailing it, then it quickly starts looking like a Titanic scenario. "Abandon ship, everyone for themselves". If you want to disappear without a murmur of interest from the public, then resign on a Friday.

Domestic Public Broadcasting Hit again


Headlines last year said that Public broadcasting would have to save "200 million Euro". In fact, €73 million of that came by drastic reductions to Radio Netherlands, the orchestras, special funds and some overheads in the Media Authority. The other €127 million was shaved off the annual budget of domestic radio and TV channels (national and regional).

Under today's plans, domestic public broadcasting would get a further hit.  This year's budget was €792.5 million Euro. This would have gone down to €665 million for 2013. Today's documents reveal a further reduction of €25 million was proposed for 2013, and €50 million off the budget in 2014/2015. I believe that means domestic public broadcasting is heading towards an annual budget of €615 million. These cuts, together with expected reduced income from advertising which runs on public channels, means almost certainly the closure of a national public TV network, leaving two national TV channels and a national network with regionalised opt-outs. 


I'd expect severe cuts in radio too. What was merely a suggestion last year as a way of saving money now becomes a necessity. 

Netherlands Public Broadcasting HQ in Hilversum

What else?


VAT rises from 6 to 7 percent (low tariff) and 21% instead of the present 19%. And student grants disappear - everything becomes student loans. I'm rather sure that The Netherlands will lose it's triple AAA status as result of a collapse in consumer confidence.

Creative Collapse in Hilversum Continues

Hilversum Danger Signals

The Dutch Broadcast magazine reports this morning (in Dutch) that negotiators from the political parties in power at the moment (VVD, CDA and PVV) have started three weeks of intense negotiations on how to make another round of cuts in public spending. 


They won't be saying anything for another three weeks (officially) but they have (of course) already let slip that another round of budget cuts in public service broadcasting are on the cards. Perhaps another 100 million Euro will be taken away in 2013, on top of the 200 million they cut out of of regional, national and international broadcasting for next year. 


In the case of external broadcasting, they decimated the budget of Radio Nederland Wereldomroep bringing it down from 46 to 14 million Euro. It may well not even be that in the end. 7? 5? 0 million? It's looking that way for 2013.


The current plan for the rest basically reduces the Dutch public broadcasting from 4 channels (3 national and one regional network) to 3 channels (effectively combining NED3 with the regional's) to make a structure that looks like public broadcasting in Germany and a commissioning process which looks more like Channel 4 in the UK. Radio is hiding in the corner, hoping it won't be noticed. But it will! Commercial radio is hurting big time and they haven't forgot the unfair licensing of FM frequencies 


Yes, cuts were needed in public broadcasting which under the present ludicrous (yet still unique) system of public production companies has never been further away from its public. Unlike neighbouring countries, there is no independent body which allows citizens to influence the overall policy of public service broadcasting. There is no dialogue with those who pay for the privilege of watching and listening to (mostly) bland magazine shows spread over far too many channels. 


Yes, public broadcasting has maintained reasonable market shares; for the time being. But the current senior management teams have done little to prepare their staff for the role of public broadcasting in the most austere times we are about to witness probably in a century. And when it comes to understanding what is happening in the digital household of the future, it's clear to me that they haven't a clue. No, most people don't want to live in a shop, with sales-people on every screen. And how many searches for talent can we tolerate in a lifetime? 


Lack of Vision is Killing


I still meet mini-media moguls in Hilversum who are spending as though they were working in San Francisco. "Yes, cuts should happen - everywhere except in my programme". It reminds me of what went wrong in the Netherlands just before the great floods of 1953, when no-one anticipated that stronger, coherent sea defences were needed. It's certainly calm before the storm.


But, as long as the vision in Hilversum is traditional television, the weaker the argument towards the henchmen in the Hague - and the Dutch public who pay for it all through government taxation rather than a licence fee. I'm sure the politicians have already decided. Balancing the budget is the excuse needed to press the accelerator pedal. If Hilversum doesn't anticipate what's coming in programme and public value terms, then it doesn't have a future. Because without understanding and winning public support for it's future purpose, it has little influence with the politicians and, ultimately, no point.


So is anyone in Dutch public broadcasting working on a serious Plan B? 

"The future belongs to those who see possibilities before they become obvious." 

— John Scully