Prime Minister Mark Rutte’s government resigned on Friday, accepting responsibility for wrongful accusations of fraud by the tax authorities that drove thousands of families to financial ruin, often on the basis of ethnicity.
The cabinet would remain in place for now in a caretaker capacity to manage the coronavirus crisis, Rutte said. He then rode his bike to King Willem-Alexander’s 17th century baroque Huis Ten Bosch palace in The Hague to discuss his resignation.
An election has already been scheduled for March 17 at the end of Rutte’s third term.
“This is about tens of thousands of parents who were crushed under the wheels of the state,” Rutte told journalists. “There can be no doubt, this is a colossal stain.”
A parliamentary inquiry found last month that officials at the tax service had wrongly accused families of fraud over childcare subsidies, causing an “unprecedented injustice”.
Around 10,000 families had been forced to repay tens of thousands of euros each, in some cases leading to unemployment, bankruptcies and divorces. Many of the families were targeted based on their ethnic origin or dual nationalities, the tax office said last year.
“It is never acceptable for someone to feel they are being discriminated against based on nationality, race, gender, or sexual (orientation),” Rutte said. “It is absolutely unacceptable in a law-based state.”
Orlando Kadir, an attorney representing around 600 families in a lawsuit against politicians, said people had been targeted “as a result of ethnic profiling by bureaucrats who picked out their foreign-looking names”.
According to former ruling People’s Party for Freedom and Democracy (VVD) MP and European Council on Foreign Relations spokesman, Han ten Broeke, the parliamentary inquiry’s “extremely harsh” conclusions described the tax authorities’ abuse of power as “unrivalled.”
Ten Broeke, who served as MP between 2006 and 2018, the childcare subsidy system was prone to fraud, but it fell victim to a clampdown Dutch authorities had ordered on fraudulent claims in a different social benefit programme.
That programme was addressed to people with low income and it was exploited by people from other EU countries.
However, the clampdown gradually widened, leading to a bureaucratic and inhumane execution of the rules, ten Broeke said.
Socially vulnerable families ended up with thousands of euros in personal debt to the state but in many cases the tax authorities were wrong, he said.
But ten Broeke does not expect the affair to have a political cost on any party, even on the ruling VVD, because all parties had a hand in the scandal since social benefits in the Netherlands are the result of political compromise.
The crisis comes with the Netherlands in the midst of the toughest lockdown of the COVID-19 pandemic, and Rutte considering even more curbs as infections surge.
Even though public support for the government’s COVID-19 measures has dipped sharply in recent weeks, Rutte’s VVD is still riding high in public opinion polls ahead of the March election.
Rutte, in power since 2010, has been on course for a fourth term, with his party projected to take just under 30% of the vote, more than twice that seen going to the second placed PVV, the anti-Islam party of Geert Wilders.