Cabinet faces €20bn shortfall
Friday 13 February 2009
The cabinet is facing a €20bn shortfall and will have to make drastic cuts in spending to avoid pumping up the budget deficit above 2%, sources in The Hague told NOS tv.
The bill for unemployment benefit is set to rise by €3bn next year and tax income is well below forecasts, NOS said. Income from natural gas is also down sharply.
The Financieele Dagblad says the new shortfall, coming on top of the €12bn already calculated in, could boost the budget deficit to 5%. Last year there was a surplus of 1%.
The official forecasts are due to be presented next Tuesday and will form the basis of the cabinet’s spring talks on spending plans.
Pay freeze
Senior ministers met on Thursday night to discuss measures to boost the economy. They also decided to freeze ministers’ salaries at their current level. A pay rise would send out the wrong signal, prime minister Jan Peter Balkenende said after the meeting.
Balkenende declined to comment on the new deficit forecast.
Commentators say that even if the government decides to let the budget deficit go above the 2% agreed in the coalition accord, ministers will still have to make cuts.
The cabinet has set up a committee of senior civil servants to make recommendations. The options include raising the retirement age, reducing mortgage tax relief, cuts to unemployment and child benefit and scrapping tax benefits for non-working parents with young families.
© DutchNews.nl
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Thursday: Overcast with showers with occasional sunny spells. Max 14º in north, 19º in south 
Hum...As I said in one of my previous postings, I warned about the tax base shrinking due to the culture changes that this christian government did and continuous to do. Where did all the NEW people who did not go eat or drink and many other things due to all that awful smoking. Where did all the high-end shoppers go that were so upset with all those red-light windows....and all of the people who used to come to Amsterdam to enjoy the coffee shops in peace. Of course they will tell you its the slowdown in the world economy, which is for sure a little, but Amsterdam will continue to loose its tax base even when the economy picks up because its not the Netherlands anymore. Wake up people of the Netherlands and change government before they take everything away from you...you might not miss it because they will have you working till your 80.
By alanposting | February 14, 2009 11:36 AM