4. Government spending on culture and media

Within the framework of the national accounts, the government sector encompasses the classic government functions that are mainly concerned with public administration. In particular, this concerns the central government, local authorities, provinces, water boards and compulsory social security organisations. The Public administration sector, as set out in the supply and use table, consists of named government sectors, supplemented with services on which the government more or less has a monopoly, such as policing, the justice system and defence.
However, in addition to these government sectors which mainly concern themselves with public administration, a large group of organisations and institutes that are also counted under government carry out tasks delegated to them by central government, the provinces and local authorities. These institutes are mainly included as non-profit institutions (NPIs) at a local or central government level, depending on the layer of government under which these organisations fall. In a general sense, these include a large number of publicly financed educational establishments, sheltered employment, regional transport organisations, waste processing firms and institutions concerned with health and welfare. Examples of institutions in the culture and media sector that are counted as government institutions include many libraries and museums, the Rijksmuseum Foundation, the National Library of the Netherlands, regional broadcasters and the Netherlands Broadcasting Corporation (NOS).
As has already been mentioned, the government organisations that concern themselves with public administration are grouped within Public administration. Government organisations such as libraries, museums and broadcasters are divided into either Libraries, museums and nature conservation or Programming and broadcasting activities; these are also services that fall within culture and media rather than public administration.
The box in this chapter briefly explains which decision-making rules underpin the choice of whether or not to include an organisation in the government sector.

What does CBS include in the government sector?
To produce macroeconomic statistics about public finances, such as the general government balance and government debt, CBS defines the government according to European regulations and guidelines. As a general rule, two questions should be answered in order to determine whether an organisation should be included in the government:
- Do public institutions have decisive control? This means: are public institutions authorised to set the institution’s general policy or programme?
- Is the institution a market producer? That is to say: does the institution operate in a market in which the prices and the amounts of its goods and services are determined by supply and demand?

Because this definition of a market producer is somewhat abstract, in order to determine whether or not a public entity is a market producer, the entity is tested against a concrete criterion: the ‘50% criterion’. This is based on the relationship between the sales and the production costs. To be considered a market producer, the public entity must cover at least 50 percent of its production costs through sales over a continuous period of at least three years. For example: housing foundations and associations and the educational establishments financed by DUO are both public entities. When the 50% criterion is applied, it becomes clear that the housing foundations and associations cover almost all their production costs through sales, such as rental returns; they are therefore market producers, which makes them government corporations. The educational establishments, on the other hand, make almost no sales, which means that they are not market producers and are instead government organisations. For similar reasons, rail travel provider NS is a government corporation and rail network manager ProRail is a government organisation. Government corporations do not belong to the government sector; they are ‘simply’ part of the business sector.

On the basis of the above, the scope of the government sector is therefore greater than public administration alone (central government, local authorities, provinces, water boards). A large number of organisations that are counted as government organisations carry out duties delegated to them by the central government, local authorities, provinces and water boards. These duties belong to very diverse areas: from health and welfare through research and development to culture. Especially when it comes to other local government, many organisations are included in the statistics, such as welfare organisations, museums, libraries, sheltered workplaces and institutions for youth protection and juvenile rehabilitation.
For a more detailed explanation, as well as the complete list of institutions CBS considers to be part of the government, please see: Wat rekent het CBS tot de sector overheid? (page in Dutch)

1.5 percent government spending on culture and media

Total government spending in 2018 was EUR 327.3 billion; EUR 4.8 billion (1.5 percent) of this was spent on culture and media.⁵⁾ As this share was 1.3 percent in 2015, spending on culture and media increased by slightly more than total government spending between 2015 and 2018.
In 2018, two-thirds (67 percent) of government spending on culture and media related to the production of cultural and media products, with one-third (33 percent) consisting of other expenditure. This ratio is slightly different for total government spending, of which 41 percent was production-related and 59 percent was other expenditure (see Figures 4.2a and 4.2b). ‘Other expenditure’ is largely made up of redistributive expenditure: money from public funds that is redistributed in the form of subsidies, capital transfers, income transfers and – especially across government as a whole – social benefits.⁶⁾
Production-related government spending refers to the government’s expenditure that is derived from the provision of public services. This includes public administration by the central government and the municipalities and provinces, as well as public services provided by organisations that are classified as government organisations. In terms of culture and media, these organisations include the Rijksmuseum, the National Library of the Netherlands, the Netherlands Broadcasting Corporation, the Dutch Media Authority and many regional museums, libraries and broadcasters. These types of organisations are included among the NPIs for the layer of government to which they belong.

4.1 Government spending on culture and media¹, by layer of government
% of the total expenditure by layer of goverment	2015 (% of total spending by layer of goverment)	2018 (% of total spending by layer of goverment)
Government²⁾	1.3	1.5

Central government	1.2	1.4
o.w. National government	1	1.1
Other central government	7.3	7.7

Local government³⁾	2.2	2.3
o.w. Municipalities	2.8	2.9
Provinces	3	5.5
Local NPIs	17.5	19
N.B. This is the government's consolidated expenditure. Payments from the National government to local government for instance are spendings of National government, but not for the government as a whole. ¹⁾Spending on policy areas 8.02 Culture and 8.03 Publishers and broadcasters in the Classification of the Functions of Government (COFOG). ²⁾In addition to central and local government, social security funds also come under ‘government’. The social security funds’ expenditure is therefore included in the total for the government but not listed separately because expenditure on culture and media is nil. ³⁾Water boards, joint schemes and some educational institutions are also counted as local government. These institutes’ expenditure is therefore included in the total expenditure for local government but not stated separately, because expenditure on culture and media is practically nil.

4.1 Government spending on culture and media¹, by layer of government
% of the total expenditure by layer of goverment	2015 (% of total spending by layer of goverment)	2018 (% of total spending by layer of goverment)
Government²⁾	1.3	1.5

Central government	1.2	1.4
o.w. National government	1	1.1
Other central government	7.3	7.7

Local government³⁾	2.2	2.3
o.w. Municipalities	2.8	2.9
Provinces	3	5.5
Local NPIs	17.5	19
N.B. This is the government's consolidated expenditure. Payments from the National government to local government for instance are spendings of National government, but not for the government as a whole. ¹⁾Spending on policy areas 8.02 Culture and 8.03 Publishers and broadcasters in the Classification of the Functions of Government (COFOG). ²⁾In addition to central and local government, social security funds also come under ‘government’. The social security funds’ expenditure is therefore included in the total for the government but not listed separately because expenditure on culture and media is nil. ³⁾Water boards, joint schemes and some educational institutions are also counted as local government. These institutes’ expenditure is therefore included in the total expenditure for local government but not stated separately, because expenditure on culture and media is practically nil.

Central government

In 2018, the central government spent EUR 2.7 billion on culture and media.⁷⁾ This represents an increase in the share of culture and media in total spending by central government, from 1.2 percent in 2015 to 1.4 percent in 2018. Central government spending is distributed roughly equally between production-related expenditure and other expenditure. Within central government other expenditure dominates the national government’s spending on culture and media. When it comes to other central government, including non-profit cultural and media institutions, spending is more evenly distributed between the two categories. For both layers of central government, as well as for the central government itself, the share of culture and media in the total expenditure of the respective layer of government increased between 2015 and 2018.

Local government

In 2018, local government spent EUR 2.3 billion on culture and media, representing 2.3 percent of total local government spending in that year (2.2 percent in 2015). At the local government level, spending on culture and media is dominated by production-related expenditure. Local cultural institutions make a strong contribution in this area. While this group’s spending on culture and media consists almost entirely of expenditure related to production – ‘delivering’ cultural and media products – other expenses are still prevalent in the municipalities themselves. Moreover, some of this money goes to local cultural institutions, which can be seen as the final destination of these redistribution operations.
Provinces do not spend a great deal of money on culture and media.

4.2a Total government spending, 2018
Total government	Expenditure associated with production (% of total spending)	Other expenditure (% of total spending)
Local NPIs	95	5
Other central government	87	13
Local government	78	22
Municipalities	54	46
Provinces	43	57
Government	41	59
Central government	26	74
National government	15	85

4.2a Total government spending, 2018
Total government	Expenditure associated with production (% of total spending)	Other expenditure (% of total spending)
Local NPIs	95	5
Other central government	87	13
Local government	78	22
Municipalities	54	46
Provinces	43	57
Government	41	59
Central government	26	74
National government	15	85

4.2b Total government spending on culture and media, 2018
Culture and media	Expenditure associated with production (% of total spending)	Other expenditure (% of total spending)
Local NPIs	98	2
Other central government	53	47
Local government	80	20
Municipalities	36	64
Provinces	24	76
Government	67	33
Central government	50	50
National government	9	91

4.2b Total government spending on culture and media, 2018
Culture and media	Expenditure associated with production (% of total spending)	Other expenditure (% of total spending)
Local NPIs	98	2
Other central government	53	47
Local government	80	20
Municipalities	36	64
Provinces	24	76
Government	67	33
Central government	50	50
National government	9	91

Local NPIs account for the largest share of culture and media

Other central government (7.7 percent in 2018) and local NPIs (19 percent in 2018) had the largest share of culture and media in total expenditure among all the various layers of government. This refers to the local museums, libraries and regional broadcasters that are treated as government organisations.

Share of culture and media increased

The share of culture and media in total spending increased in every layer of government between 2015 and 2018, This does not necessarily say anything concrete about the level of spending, as other expenditure may have decreased. However, even in nominal terms, spending on culture and media increased across the board.

The government’s total consolidated expenditure on culture and media in 2018 amounted to EUR 3.5 billion, while spending on publishers and broadcasters (media) amounted to EUR 1.3 billion in that year. It is important to note that spending on culture is concentrated more at the local level, while spending on publishing and broadcasting is concentrated more within central government.

Detailed findings on government spending on culture and media are provided in Table 4.

⁵⁾ This is the government’s consolidated expenditure, meaning that it does not include money flows within the government. This is particularly relevant to the subsidies and income transfers. This is also why, for example, the sum of subsidies and income transfers from central and local government is greater than the government total. Money flows from central government to local government, and vice versa, are separated into central and local government and recorded as such, but for the government as a whole this expenditure is consolidated. In practice, this refers to government spending associated with the production of government services by the government itself, together with subsidies, capital transfers, income transfers and social benefits extended to non-governmental organisations and institutions.
⁶⁾ Table 4 in the Appendix to this publication sets out this other expenditure in more detail.
⁷⁾ Please note that central government spending includes expenditure by the central government on items such as local government. From the perspective of the central government, this is also expenditure. The expenditure has been compiled from the perspective of the respective layer of government.
⁸⁾ Spending by the municipalities and provinces relies heavily on the administrative data provided by these layers of government on their culture and media spending. Municipalities reported that they spent EUR 1,910 million on culture and media in 2018; provinces reported culture and media expenditure of EUR 308 million in that year (CBS, StatLine).