"Tough measures needed in good times"

18th September 2007, Comments 0 comments

18 September 2007, THE HAGUE – The cabinet will introduce a number of tough measures next year, which will cause most households' purchasing power to either stall or decline slightly. But the purchasing power prospects for the whole of the cabinet's term are favourable.

18 September 2007

THE HAGUE – The cabinet will introduce a number of tough measures next year, which will cause most households' purchasing power to either stall or decline slightly. But the purchasing power prospects for the whole of the cabinet's term are favourable.

Working people and families with children will see their purchasing power increase by 4 to 5 percent by 2011.

Prime Minister Jan Peter Balkenende said this on Tuesday while discussing the budget memorandum and the address from the throne for 2008. The prime minister defended the fact that the cabinet will be raising taxes next year despite the considerable economic growth. "We will repair the roof now while the sun is shining."

Balkenende acknowledged that the highest incomes will be burdened a bit more next year because of a number of tax measures. "The strongest shoulders bear the heaviest burdens." But the prime minister did not want to call it "levelling." "That is such an old fashioned word, I find."

Balkenende stressed that the tax increases next year will primarily be a result of rising health care premiums. On the other hand there are some measures that will benefit households' disposable income, even though this will not be reflected in purchasing power figures.

School books for secondary education will be free, for example, which will mainly benefit middle and higher incomes, Balkenende said.

Balkenende did not want to enter any specific discussion on the proposal from FNV trade union confederation for a 3.5-percent increase in wages for 2008. In general he pointed out that a strong increase in wages adversely affects employment and can also drive up prices.

The prime minister recalled the 1990s, when "the trees seemed to grow as high as the heavens." The Netherlands had to pluck the bitter fruit of these salary increases at the beginning of this century.

Balkenende refrained from comment on the crisis in which the liberal VVD finds itself with the departure of Rita Verdonk. He did say that all parties go through rough periods.

If a party is in the opposition, it is easy for things to settle down, Balkenende said, referring to the experiences of the CDA in the 1990s.

[Copyright Expatica News + ANP 2007]

Subject: Dutch news

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