Features
Dutch Cultural Sector To Lose $386M Over Proposed Government Policies
The Dutch government has been making plans to implement policy changes that would severely damage the country’s cultural sector, a study commissioned by private financiers, municipalities, as well as the Dutch arts and culture sector, finds.
Government plans include a VAT (sales tax) increase from 9% to 21% (!), and a reduction of municipal and government subsidies.
When these plans were first announced earlier this year, the Dutch biz was immediately concerned, and this new study shows why in concrete numbers. As Kunsten ’92, the interest group for the Dutch cultural sector, points out in its summary of the findings, the government’s proposed cultural policy would result in a loss of €350 million euros ($386 million) to the sector, and have a negative domino effect in the wider arts world.
The VAT increase, in particular, seems drastic, especially when considering the pleas coming from the UK industry directed at their own political leaders, asking to reduce the 20% VAT rate currently in effect. The UK has permanently or temporarily lost 60 festivals in 2024 alone, because they couldn’t balance their budgets in the current economy. Virtually every individual and organization representing the UK’s cultural industries has been calling for a VAT reduction to 5% – even a temporary one – as one of the most effective ways to save a struggling independent and grassroots live music ecosystem.
The proposed VAT increase in the Netherlands costs the sector more than it yields for the state treasury, said Cathelijne Broers, director of the Dutch culture fund Cultuurfonds. She said that the government underestimated the loss of audience income due to promoters having to increase their ticket prices in order to offset the costs for personnel, materials, and energy, which would also rise due to the VAT increase.
The study, which is available in Dutch language here, also shows how the proposed measures would affect overall employment and economic security in the Netherlands, where the arts and culture sector is responsible for a direct contribution of €5.5 billion ($6.1 billion) to the country’s GDP, and, together with the creative industry, provides work for 392,000 people. Broers warned, not to underestimate the social values of art and culture. “It brings people together, encourages critical thinking and has a positive effect on our health,” she said.
The analysis points out, that, on average, the cultural sector is funded by 50% subsidy, and 50% own income, which consists of 40% audience income and 10% private financing. Reducing municipal as well as central government funding would have a domino effect, according to Broers, as private financiers couldn’t neither make up for the arising funding gaps, nor be expected to continue to invest as the risks increased alongside the cost increases.
As usual, this would mainly be at the expense of small and medium-sized businesses, institutions, and creatives, resulting in “an impoverishment of the cultural infrastructure that is already tangible” in large parts of the country.
The consortium of private financiers, municipalities, and cultural organizations that commissioned the study therefore “urgently requests a postponement of the VAT increase,” so that a thorough investigation of its effects could be conducted first.