Defence Budgets – Defence Cuts Example – April 2011
$1.3 Billion Cut from Defence — Bleak Future Plans from the Dutch
The 'wind down' of the Canadian Forces' combat mission in Afghanistan brought out odd reactions in
NDHQ planners. Some seemed to regard this war as an unwelcome interruption to their planning schedule. With combat
coming to an end for CF troops, Ottawa planners could get back to the real job – preparing for less messy,
largely hypothetical threat scenarios of the future. DND's budget – which would no longer need
to be squandered on actual fighting – had been increased and regular future rises in that budget were all but
guaranteed. Happy days! But now flies keep appearing in that ointment. Dutch Ministerie van
Defensie experiences might be instructive.
This month the details were announced of how Dutch government cuts to Defensie budgets will play out. Not
long returned from their own Afghanistan deployment, the Dutch see little tangible results for their national
effort. Nor are they clear why their post-Cold War military needs to remain as large as it currently
is. To address this and a "worldwide financial crisis", Defensie has seen its budget cut by € 942.5 M or
more than $1.3 Billion Canadian. Immediate cuts amount to € 617.5M ($853.8 M) followed by further near-term
cuts of € 175 M ($242 M), and another € 150 M ( $207 M ) in cuts later
on. All this should give NDHQ planners pause.
Politicians and bureaucrats in Ottawa would quickly assure citizens that Canada's economic situation is
different from that of the Netherlands. That maybe so but it also matters what is being measured exactly. 
The take-home is that the previous Canadian Government – one which will likely be re-elected – has
promised to reduce its overall spending while increasing the military budget. Dutch government cuts total €
18 B (or almost $25 B) making their actual defence cuts a drop in the bucket. Anyone who doesn't believe that DND
and the Canadian Forces face a similar (if distant) future is living in Cloud-Cuckoo-Land. Enjoy it while it
Below is a slightly edited version of the Defensie news article. The original is available here.
 In the last reporting period (2009-2010) Canada’s debt-to-GDP ratio was 37%. The Dutch debt/GDP is 467%. In the
same period, Canada's public deficit was $53.8B (3.5% of GDP), the Dutch government deficit in 2010 was € 31B
($59.2 B, 5.4% of GDP ). So Canada looks good.
When public debt is examined, the effect is slightly different. The Netherlands had a gross debt
of over € 388.65 B or $537.062 B. But the Canadian gross debt for 2010 was not that far behind, hitting
almost $520B in 2010. After the 2008 meltdown, Canadian politicians became downright smug about our national
aversion to risk. Works for banks, what about exports?
Compare the Netherlands with Canada again. In 2010, the Dutch trade surplus hit € 22.1 B or $30.54 B. Canada's
trade deficit almost doubled in 2010, hitting $9 B while growing monthly. That poses the question: in the
absense of trade surpluses, what pays for projected $191 M increases to the FY 2011/2012 DND budget (scheduled to
jump from $21.102B to $21.293B) ?
Netherlands' Defence organisation hit hard by cutbacks
14 April 2011
The Netherlands Defence organisation has been hit hard by the cutbacks announced today by Dutch Defence Minister
Hans Hillen. The following is a brief outline of the key measures:
Cutbacks amounting to € 617.5M will be made in administration and management, support and operational
logistics. That amounts to 64 percent of the total amount. The staffs will be reduced by 30 percent, and
administrative and management relations and processes will be simplified. The number of top-level positions will be
reduced from 119 to 80. One thousand civilian service cars will go, and VIP transport will be scaled down.
The Royal Netherlands Navy will reduce the number of [ Alkmaar class ] minehunters from 10 to 6.
Two of four new [ Holland class ] ocean-going patrol vessels will not be taken into service.
One of the two supply ships will be phased out. [ The replenishment ship ] HNLMS Zuiderkruis will be taken
out of service at the end of 2011, after its planned deployment as part of the EU operation
Atalanta. [A second replenishment ship ] HNLMS Amsterdam will remain in service until 2014 and will be
replaced by the Joint Supply Ship [ JSS aka JLOS ].
Two tank battalions [TKbtn] of the Royal Netherlands Army will be disbanded. In addition, a reduced number of
self-propelled howitzers [PzH2000NL] will be brought together with the [HB Rayé towed] 120mm mortars
under a single field artillery battalion, and the construction engineers and armoured engineers capability will be
reduced, as will air defence capabilities and the number of Medium-Range Antitank systems [Rafael
Gill/Spike ATGM] on Fennek vehicles. The maintenance capability will also be decreased.
Personnel reductions at the headquarters of the [ joint 1 (German/Netherlands) Corps ]
will be agreed with Germany.
The Royal Netherlands Air Force will reduce its number of F-16s from 87 to 68. The Cougar transport
helicopters will be phased out and the third DC-10 [as opposed to KDC-10 tanker] won't be taken into service. The
air force will also disband two Ground Installation Defence platoons and one of the four Patriot [AD
missile] batteries will be taken out of service.
The Royal Netherlands Marechaussee [ KMar paramilitary
and ports police] will cancel the purchase of the vessel intended for use in the Zeeland waters. As a result of the
reduction of the armed forces, the RNLM police tasks for the armed forces will also be reduced. [...]
These measures are the result of the worldwide financial crisis. The Dutch government has to reduce spending by
€ 18 B, € 635 M of which must be saved by the Ministry of Defence. In addition, the Defence
organisation must cut back an additional € 175 M, and further € 150 M over the longer term, in order for
the Defence budget to become financially sound again.