Cabinet dismisses purchasing power 'shame'

8th December 2004, Comments 0 comments

8 December 2004 , AMSTERDAM — The Dutch government has refused to reduce its planned budget cuts in 2005 despite a warning from the Social Affairs Ministry on Tuesday that most income groups will lose 0.25 percent more in purchasing power than previously expected.

8 December 2004

AMSTERDAM — The Dutch government has refused to reduce its planned budget cuts in 2005 despite a warning from the Social Affairs Ministry on Tuesday that most income groups will lose 0.25 percent more in purchasing power than previously expected.

The coalition government parties Christian Democrat CDA, Liberal VVD and Democrat D66 rejected a demand from main opposition party Labour PvdA to use EUR 300 million from better-than-expected gas profits to shield the public from a "shameful" loss of purchasing power, newspaper NRC reported.

Nevertheless, CDA MP Gerda Verburg said social organisations such as Riagg or Diakonie should assist people in claiming special social security benefits (bijzondere bijstand). The VVD and D66 said several tens of millions in euros could be found in the budget to inject into the special benefits programme.

People on the bijzondere bijstand system earn a low income, but have high costs due to medical expenses relating to a disability or chronic illness. Concerns have been expressed in the Netherlands that vulnerable groups will be hardest hit by the loss of purchasing power next year.

The larger-than-expected fall in purchasing power will be brought on by rising health insurance costs. Social Affairs Minister Aart Jan de Geus forecast on budget day in September that insurance premiums will rise by 4.5 percent in 2005, but various estimates have since placed that figure at 8 percent.

Pensioners with only the AOW pension and minimum wage earners are now expected to lose 0.5 percent in purchasing power, instead of the previously forecast 0.25 percent. Singles earning a minimum wage will lose 1.75 percent and households with twice the average income will lose 1.5 percent in purchasing power.
 
But Health Minister Hans Hoogervorst said the Cabinet — which has unveiled EUR 1.5 billion in budget cuts for next year — was still running a balanced income policy. Government coalition MPs also said the higher-than-expected loss in purchasing power was no reason to change course.
 
Despite this, trade union confederations FNV and CNV demanded Tuesday extra measures to compensate the public for the loss of purchasing power. The unions said they had previously warned the government that purchasing power would decline more than initially expected.

[Copyright Expatica News 2004]

Subject: Dutch news

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