The possibilities and uncertainties of parliament’s rejection of a budget
At the request of the House of Representatives, the Netherlands Court of Audit has mapped out the consequences of parliament’s rejection of an initial draft budget and the possible responses. Today, it sent a letter to the members of the House, with a copy for the Senate and others.
On 19 December 2024, a majority in the House of Representatives passed the Grinwis et al. motion. It stated that parliament’s rejection of a budget was no longer a ‘purely imaginary scenario’. The Court of Audit was subsequently requested on 20 March 2025 to map out the consequences and outline the possible responses available to ministers and the States General.
Three scenarios
The right to approve the budget is one of parliament’s most important rights. Parliament must approve budget bills before the start of a new calendar year. At the end of the year, the government must render account for the policy it conducted. An orderly budget process, with sufficient time for parliamentary debate and consideration of diverse options, is essential. An approved budget is the starting point for policy implementation.
The budget process, however, can be less than orderly. The Court’s letter sets out 3 scenarios. Firstly, the ideal scenario in which parliament approves a budget before 1 January. The letter then considers two scenarios in more detail in which the House of Representatives or Senate do not complete their timely approval of a budget or even reject a budget. The latter scenario is extremely rare. The Senate has not rejected a budget since 1907 and the House since 1920.
No US shut down
The consequences of a budget rejection would be substantial. There would be no basis for expenditure or new commitments. In contrast to the US federal government, however, the Dutch government would not be shut down. A Dutch minister without a budget would still have to make significant expenditures to fulfil statutory societal commitments, such as child allowance and state pension payments to which people are entitled.
The situation regarding other expenditure commitments, however, is less certain. The extent of such commitments is a legal matter and touches upon the principles of proper administration. This scenario would therefore entail a great deal of legal uncertainty. It would be particularly uncertain whether a minister could fund new measures. This would create uncertainty among government institutions, residents, businesses and other parties affected by the measures. In consequence, a minister without an approved budget would have to consult parliament far more frequently in order to determine where money can be spent.
Possible responses to a budget rejection
Legislation and legislative history provide neither ministers nor parliament with an unequivocal response to the rejection of a budget. The Netherlands Court of Audit, too, cannot give a definitive answer. We recommend that parliament seek expert advice on this. The letter outlines a possible response to such a very exceptional situation, in which parliament allows the minister to submit a new budget and continue current policy with restraint.
Prevention is better
The Court of Audit, finally, describes several ways to prevent a budget rejection. An amending act for budgets would be such a possibility. An amending act, for instance would improve or supplement a budget bill already pending in the Senate. The Senate would then adjourn its plenary debate or postpone it until the House has passed the amending act. This would prevent the definite rejection of a budget.
The letter is available only in Dutch.