PM rejects rebuke as Dutch poverty rises

17 December 2003

AMSTERDAM — Called to defend himself after new figures indicated poverty levels in the Netherlands are rising for the first time in several years, Prime Minister Jan Peter Balkenende told alarmed MPs on Tuesday that the situation was not so bad.

The Prime Minister also rejected criticism from MPs in the Lower House of Parliament, the Tweede Kamer, that the Cabinet was responsible for the rise in poverty and the loss of purchasing power among the chronically sick and handicapped.

Opposition parties, the Socialist Party (SP) and green-left GroenLinks (GL), strongly rebuked Balkenende and the government’s social policies. They said Balkenende was no longer the Prime Minister of all Dutch residents and accused him of turning his back on minimum-wage earners.

But Balkenende, the head of the centre-right government coalition, denied the Cabinet had turned a blind eye to the affects of its income policy and pointed out the Netherlands was in a relatively good position regarding poverty when compared with other European states, national news service NOS reported.

Despite this, the opposition urged the government to take stronger action to compensate vulnerable groups, such as the chronically ill and handicapped, for an expected loss of purchasing power.

The government rejected the demand, pointing out that it had recently allocated an extra EUR 110 million to these groups after figures indicated that they could lose up to 8 percent of purchasing power. Almost every one in the Netherlands will lose 5 percent of purchasing power in the coming period, Social Affairs Minister Aart Jan de Geus has admitted.

But the strength of the opposition to the government’s income policy saw the SP and GL submit a formal motion rejecting the Cabinet’s plans. Backed only by the main opposition party Labour PvdA, the motion failed to gain majority support in Parliament.

Faced with a struggling economy, the government has embarked on a cost-cutting drive to slash a record EUR 17 billion from the budget between now and 2007. Both the Social Affairs and Health Ministries were asked to contribute to the massive savings drive, but the opposition parties have demanded that extra funds be allocated to low-income earners.

After the parliamentary debate ended on Tuesday, Prime Minister Balkenende said that the cuts to social security were necessary. “It is necessary to take steps now to keep social security upright in the future,” he said.

The debate in Parliament came after the Social and Cultural Planning Bureau (SCP) bureau said that the number of households on a low income was rising, having declined in recent years.

In defining poverty, the SCP based itself on the minimum income level, which totals a net wage of EUR 8,800 per year for single people and EUR 14,400 for a family with two children.

The SCP said non-western migrants were the main victims of declining prosperity. It blamed rising poverty on higher unemployment and higher health costs and said poverty will rise to 11 percent of households next year due in part to rental subsidy cutbacks and higher AWBZ premiums (income-based healthcare insurance for long-term illness, injury and old-age).

Another contributing factor is the huge debts of poor households, 50 percent of which have difficulty in paying their debts off. In 5 to 10 percent of cases, rising debts and other problems are leading to social exclusion, the SCP said.

The Schilderswijk-Noord suburb in The Hague had the largest number of residents (45 percent) living on the minimum income (social security level) in 2000. Rotterdam is the poorest city in the Netherlands, with 22 percent of residents living on or below the minimum wage level.

Amsterdam (21 percent) and Groningen (22 percent) are the second and third poorest cities in the Netherlands, news agency ANP reported.

Ten of the 15 suburbs with the highest amount of minimum-income households are located in cities with 50,000 residents or more. Three are located in Rotterdam, two in The Hague and two in Leeuwarden in the north of the country, the SCP Poverty Monitor 2003 report said.

Between 1994 and 2001, the number of poor households in the Netherlands declined from 15 to 10 percent, or 970,000 to 640,000. This was due to economic growth and tax changes that came into effect at the start of 2001. Households were also better off in 2002.

But in comparison with other European countries, the Netherlands is among the EU member states with relatively low poverty rates. Germany, Belgium, Luxembourg, Denmark, Finland and Sweden also rate well in terms of poverty.

And governing coalition party Christian Democrat CDA said the recent rise in poverty was logical considering the difficult economic climate. MP Gerda Verburg said as unemployment rises so too does poverty. She also said the poverty rate among migrants confirmed that stronger conditions needed to be placed on integration.

The PvdA attributed poverty to rising healthcare costs, higher rents and lower child allowance payments. MP Saskia Noorman-Den Uyl said it was a “very, very serious” situation that 5 to 10 percent of households were threatened by social exclusion due to poverty.

Social Affairs State Secretary Marke Rutte said the SCP figures were no reason for the government to change its policies. He said the Cabinet’s cost-saving measures were balanced and that weaker groups in society were being assisted by a variety of measures.

Subject: Dutch news