The collapse of the Dutch government on 19 May 1999 seemed likely to lead to delays affecting several significant areas of social policy, notably amendments to the tax system and reorganisation of the ways in which social security is delivered. However, on 1 June the three parties involved reached agreement on a new coalition.
On 19 May 1999, to the surprise of many, the second-term "purple coalition" government, comprising the Labour Party (PvdA), the Liberal Party (VVD) and the Liberal Democrats (D66), disbanded. D66 withdrew because it did not achieve the two-thirds majority required in the First Chamber of parliament to introduce the use of referenda into the Dutch legislative process. The vote against the move by VVD senator Hans Wiegel was decisive.
Initially, Lodewijk de Waal, the chair of the Federation of Dutch Trade Unions (Federatie Nederlandse Vakbeweging, FNV) said that he would have preferred the cabinet to remain in office, especially with a view to rounding off a number of important matters to which the PvdA attaches great value. Mr De Waal cited revision of the tax system, the "work and care" portfolio (NL9903128F) and reorganisation of the ways in which social security is delivered (NL9807188F).
The largest employers' organisation, VNO-NCW, also emphasised that, in addition to matters like improving the general infrastructure in areas such as transport and education, the issues cited by FNV (namely revision of the tax system and reorganisation of social security) had be addressed in the short term. According to the employers' organisation, this would require the prompt formation of a new cabinet.
The reorganisation of social security appeared in particular to have been placed in jeopardy by the collapse of the administration, and seemed likely to suffer significant delays as a result. By 1 January 2001, the disbanded cabinet had intended to establish 200 Centres for Work and Income (Centra voor Werk en Inkomen, CWIs), which should potentially enable job seekers and benefit claimants to approach a single port of call for the purposes of finding work or receiving benefits (NL9812119F). Although general consensus had been reached on the validity of such "one-stop shopping", significant differences of opinion prevailed throughout parliament and the disbanded cabinet regarding the social partners' role with respect to the CWIs.
However, on 1 June, the three coalition parties reached agreement on the reconstitution of the cabinet. From 2001, they have agreed that certain bills may be submitted to the Dutch population in the form of non-binding referenda. The basis for such referenda will be a temporary law.