Earning capacity must be sought within the constraints of sustainable development
To continue generating income in the future, the Dutch economy will have to be carbon-neutral, low-resource, and nature-inclusive. The Netherlands has already set ambitious goals and made agreements in this areas. It is laid down in conventions, for example, that the economy will be carbon-neutral by the end of 2050. Activities that emit CO2 must therefore be phased out by then. It is important to avoid using the Growth Fund to invest in the expansion of activities in the current economy that are not sustainable, i.e. no longer viable in the long term.
Provide direction for sustainable investments from the Growth Fund
The government has not formulated a vision on the future economy to which the National Growth Fund investments should be aligned. As a result, the first two submission rounds for the Growth Fund led to widely diverging investment proposals, a lack of direction, and fragmentation. The Rli advises the government to set the direction for the Growth Fund investments. That direction should be based on previously established sustainability targets and the associated social challenges. These include the climate and consumption of resources. The government should set a direction that encourages society to submit investment proposals to the Growth Fund that contribute to future earning capacity within the constraints of sustainability.
According to the Rli, sustainable earning capacity cannot be adequately guaranteed by investments from the Growth Fund alone. Therefore, these investments cannot be viewed separately from the government's efforts as a whole as it works towards a sustainable economy. That will require the government to take a coherent view of the necessary transitions, its own role in it, and the use of additional policy instruments. This will also provide clarity for private parties so that they, too, can focus their future investments on a sustainable economy.
The Growth Fund is for additional investments in relation to the regular budget
The government states that investments from the Growth Fund must be additional to existing public investments, but it is not clear what exactly is meant by this. In the opinion of the Rli, the Growth Fund must at least be prevented from being used to fill the (financial) voids left by existing funds, such as the Mobility Fund. However, that already threatens to be the case. In the first round for the Growth Fund, for example, parts of infrastructure projects were provisionally awarded funding that should actually have come from the Mobility Fund.
Involve the general public in the investment choices
To make government spending politically and socially accountable, it is vital that both the government and the National Growth Fund Committee clearly communicate the reasons for investments from the Growth Fund and the results achieved. The direction taken will also determine the future economy of the Netherlands and is therefore of great importance to society. Clear communication on how the Growth Fund is being used contributes to the public debate about the development of a sustainable economy in the Netherlands, creates support for it and increases its chances of success.
Evaluate the National Growth Fund Act in due course
The Rli has taken the legislative proposal for the National Growth Fund Act (Wet Nationaal Groeifonds) as the starting point for its advisory report. The bill focuses on growth in gross domestic product and chooses technology, education and infrastructure as the investment pillars to increase the Netherlands' earning capacity. The Rli does not rule out that this approach will ultimately fall short of achieving a strong, sustainable economy.
Note for editors
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