Explained: What was the child subsidies scandal that led to the collapse of the Dutch government

The government of Netherlands collectively resigned Friday amid an escalating scandal over the mismanagement of childcare subsidies, due to which thousands of Dutch families — particularly ethnic minorities — are still facing insurmountable debt.

Speaking on behalf of the centre-right four-party coalition, Dutch Prime Minister Mark Rutte announced that his government had accepted responsibility for the scandal and would only stay on in a caretaker capacity until a new government is formed following the upcoming general election.

“The government was not up to standard throughout this whole affair,” he said in a press conference. “Mistakes were made at every level of the state, with the result that terrible injustice was done to thousands of parents.”

What was the scandal that led to the Dutch government’s resignation?

A parliamentary inquiry found that the country’s tax service had wrongly accused over 26,000 Dutch parents of fraud since 2012, and ordered as many as 10,000 of these families to repay tens of thousands of euros worth of child subsidies.

The inquiry report, published last month, concluded that “unprecedented injustice” had been done to these innocent families, as a result of which many faced unemployment, bankruptcy and divorce, Reuters reported.

According to the report, “fundamental principles of the rule of law were violated” by the Dutch tax authority and fraud investigations into the families were often triggered by something as simple as an administrative error, such as a missing signature.

Chris van Dam, the chairman of the parliamentary inquiry committee, said that the system to identify fraud was a “a mass process in which there was no room for nuance.”

Last year, the Dutch tax office admitted to singling out at least 11,000 dual national families for more stringent checks, sparking a renewed debate about systemic racism within the Dutch bureaucracy. This also points at why a majority of the families caught up in the scandal are ethnic minorities.

Have the families taken legal action against the government?

This week, twenty of the families involved took legal action against several ministers from the outgoing coalition, accusing them of criminal negligence by failing to adhere to the principles of good governance, discrimination and violating children’s rights, the Guardian reported.

Dutch Health Minister Tamara Van Ark, Finance Minister Wopke Hoekstra, Economic Affairs Minister Eric Wiebes, former Tax Minister Menno Snel and opposition Labour Party leader Lodewijk Asscher were all named in the court documents.

In fact, Asscher, who was Social Affairs Minister between 2012 and 2017 — the period when the scandal was playing out, unbeknown to most — stepped down from his job on Thursday, after facing widespread criticism. But he insisted that he was unaware that the tax authority was “wrongly hunting down thousands of families”.

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How has the government responded to the parliamentary enquiry report?

Soon after the report was published last month, the Dutch government announced a compensation of at least 30,000 euros for each of the families falsely accused of fraud. On Friday, Dutch PM Rutte handed in his resignation to King Willem-Alexander, stating that the political responsibility of the scandal lay with his cabinet.

“Things cannot ever be allowed to go so terribly wrong again,” he said.

Earlier, Rutte — who has been serving as Prime Minister of the country since 2010 — said that his government would not resign as it would get in the way of the national response to the coronavirus pandemic. However, public pressure to resign started to build after Asscher stepped down from his post, observers say.

What next for Rutte and his cabinet?

For now Rutte and his cabinet will remain in power in a caretaker capacity until the country’s general election scheduled for March 17. But polls suggest that his People’s Party for Freedom and Democracy is likely to win a fourth term.

According to the Guardian, the party is predicted to come back to power with 30 per cent of the vote, which is more than twice the vote share forecast for the Geert Wilders’anti-Islam Freedom party — the second most popular party in the country.

Since 2010, when he first came to power, Rutte has been reelected twice.

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