Cabinet 'yields to union demands, accord close'

4th November 2004, Comments 0 comments

4 November 2004 , AMSTERDAM — The Dutch Cabinet is prepared to drastically expand the scope of a life savings scheme to meet union demands on early retirement and so win a hard-fought social accord, according to reports.

4 November 2004

AMSTERDAM — The Dutch Cabinet is prepared to drastically expand the scope of a life savings scheme to meet union demands on early retirement and so win a hard-fought social accord, according to reports.

But political sources also told public news service NOS on Thursday that the cabinet's plan to scrap the tax breaks on the VUT and pre-pension early retirement schemes will go ahead.

Nevertheless, workers who make use of both a life savings scheme (levensloopregeling) and their old-age pension will be able to stop work from about the age of 60.

The cabinet is prepared to extend the tax free period of life savings schemes and offer a tax bonus for low income earners. Employers may also make tax deductible payments to savings schemes and workers who do not participate will be paid a taxed employer's contribution.

The measures — including the possibility of workers being allowed to partly use savings to stop work early in exchange for a lower pension — are designed to stimulate the use of life savings schemes.

The bitter dispute between unions and the government has also hinged on wage moderation and planned social security cuts. But various compromises now appear to be in the works, NOS reported.

Unions and employers are expected to discuss the proposals with the cabinet on Friday night, but the chief of the trade union confederation FNV, Lodewijk de Waal, warned that the negotiations did not mean that an accord was guaranteed.

But grassroots union members backed the concept accord earlier this week and, after weeks of public protests and strikes, if an agreement is reached between the cabinet and its social partners on Friday, the industrial action campaign will be called off.

Meanwhile, 40 prominent Christian Democrat CDA party members have strongly rebuked the cabinet and CDA MPs. They said the planned austerity measures were necessary, but were primarily impacting disadvantaged groups.

The CDA members said it was incomprehensible that the cabinet and the CDA parliamentary faction did not want to examine a possible revision of the mortgage tax deduction scheme (hypotheekrenteaftrek) as a means to yield alternate savings.

Parliamentary leader Maxime Verhagen dismissed the criticism, claiming that the reforms are aimed at maintaining solidarity between generations. He also said the party was honouring its Christian Democrat ideals.

[Copyright Expatica News 2004]

Subject: Dutch news

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