Cabinet in agreement on budget

31st August 2007, Comments 0 comments

31 August 2007, THE HAGUE – The cabinet reached agreement on the budget for next year on Thursday. Finance Minister Wouter Bos said after a cabinet meeting on Thursday that "a solid financial policy" and "healthy purchasing power outlook" had been agreed. He says all 16 ministers gave full approval to the plans for 2008.

31 August 2007

THE HAGUE – The cabinet reached agreement on the budget for next year on Thursday. Finance Minister Wouter Bos said after a cabinet meeting on Thursday that "a solid financial policy" and "healthy purchasing power outlook" had been agreed.
 
He says all 16 ministers gave full approval to the plans for 2008. 

The deputy prime minister did not want to comment on the actual plans that will be presented on Budget Day. But insiders say the cabinet has agreed on measures to allow minimum wage earners and incapacity benefits recipients to hold on to purchasing power. Most other households will see their purchasing power decrease slightly (by a quarter to a half of a percentage point).

Figures from the Bureau for Economic Policy Analysis indicated earlier that many families would see purchasing power decrease by about 1 percent in 2008 if the cabinet did not intervene.

Bos said the agreement reached on Thursday on restoring purchasing power was "a very sound decision." The other deputy prime minister, André Rouvoet, said the package of measures was "a nice balance of what we wanted to achieve."

Bos also make it clear that the cabinet has virtually reached agreement with the housing corporations on their contribution to the financing of improvements to problem neighbourhoods. He did not want to go into detail but sources in The Hague say a agreement is being drawn up which stipulates that the corporations will have to pay company tax on all profits they make, just like businesses. This measure will yield EUR 2 billion a year.

That sum will ensure that government financing remains in order. The corporations will also invest further in problem neighbourhoods together with the state. Minister for Housing, Communities and Integration Ella Vogelaar is working with the corporations to make agreements on this.

In order to ensure that the government deficit in 2011 is converted into a surplus of 1 percent, as agreed in the coalition agreement, the cabinet will carry out a number of tax hikes. The excise duties on petrol will increase by 1 cent. Drivers of lease cars will be charged higher tax. Taxes on alcohol and tobacco will also be increased.

Cutbacks will also be made to government subsidies. The defence department however will be spared.

Insiders say that the cabinet also wants to take extra measures to ensure that more people find jobs. That is necessary to cushion the costs of the ageing workforce.

[Copyright Expatica News + ANP 2007]

Subject: Dutch news

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