Cabinet to accept EUR 1bn in reduced cuts

28th September 2004, Comments 0 comments

28 September 2004 , AMSTERDAM — An alternative financial plan drawn up by government party MPs rather than confrontational union strikes and protests has reportedly prompted the Dutch Cabinet to reduce next year's budget cuts by EUR 1 billion.

28 September 2004

AMSTERDAM — An alternative financial plan drawn up by government party MPs rather than confrontational union strikes and protests has reportedly prompted the Dutch Cabinet to reduce next year's budget cuts by EUR 1 billion.

Political sources in The Hague claim that Finance Minister Gerrit Zalm is not resisting the alterations proposed by the Christian Democrat CDA, Liberal VVD and Democrat D66 factions to the 2005 Budget, which was unveiled last week

The VVD minister — who will stand in for hospitalised Prime Minister Jan Peter Balkenende on Tuesday and Wednesday during the budget debate in parliament —has no objections to the financial measures the CDA, VVD and D66 have devised to fund their plans.

Ministers are set to accept the changes, which were examined on behalf of Minister Zalm in recent days for their "technical feasibility", news agency ANP reported on Tuesday. The plans will be discussed further in Parliament on Tuesday.

If the compromise proposals are accepted by the government, cuts to the education budget will not proceed, cuts to the VUT and pre-pension early retirement schemes will be eased and the combination of WW unemployment benefits and redundancy payments will remain.

It also means that the grey number plate scheme exempting company vehicles from the BPM registration tax will be preserved and planned cuts to the arts will be reduced by 50 percent. An attractive fiscal arrangement for the Dutch film industry will also be preserved.

The government unveiled proposals on 21 September to save EUR 2.5 billion next year in spending cuts and higher taxes to reduce the budget deficit to 2.6 percent of Gross Domestic Product (GDP). It claims the cuts are necessary to strengthen the economy in the long term.

The next day, the coalition factions unveiled alternatives to reduce the cuts by about EUR 1 billion, but the exact nature of the plan's financial structure was not immediately known. The three parties have succeeded for almost a week in keeping much of the plans secret.

It has since been revealed that the factions have will propose at least 21 changes to the budget to obtain the planned EUR 1.1 billion in reduced cuts. Most of the charges relate to small amounts and the largest is EUR 100 million.

The parties want independent administrative agencies such as the government's social security bureau UWV to work more efficiently.

Employers will also in future be required to withhold income tax on company lease cars. Under the present system, workers deal with the tax office directly.

It has also been revealed that the CDA, VVD and D66 want to raise the interest charged to taxpayers whose repayments are overdue. The minimum amount of EUR 217 needed before the tax office moves to claim repayments will be scrapped.

[Copyright Expatica News 2004]

Subject: Dutch news

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