DutchNews.nl - Budget leaks: deficit 3.9%, inflation 1.5% but growth forecast is down

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Budget leaks: deficit 3.9%, inflation 1.5% but growth forecast is down

Thursday 16 September 2010

The budget deficit will go down to 3.9% next year, below earlier estimates, RTL news said on Wednesday evening, quoting from a leaked government report.

The latest economic estimates from the government's macro economic planning office are due to be formally given to MPs next week as part of the annual budget presentation.

The leaked report says unemployment will drop to 5.5%, not 6% as earlier forecast, and inflation will be 2%. But the economy will not grow as fast as forecast earlier with an increase of 1.5% rather than 1.75%, the leaked document shows.

Civil service

The outgoing government is also planning to slash spending on the civil service by €230m - the equivalent of 4,000 jobs - by 2015, the Volkskrant reports on Thursday, quoting its own leaked cabinet documents.

The reduction is part of the cabinet's efforts to make €3.2bn-worth of savings because of ministerial overspends over the past year.

The cuts come on top of the government's commitment to cut civil service numbers by 12,800 when it came to power in 2007, the paper says.

New cabinet

The bulk of the €3.2bn is to be raised by 'wage moderation' for civil servants - a measure leaked several weeks ago. Subsidies for childcare are also to be reduced, new immigrants will have to pay more towards the cost of compulsory integration courses and taxes on tobacco are to be increased.

RTL says the leaks bring good news for the three parties currently in talks on forming a right-wing cabinet because it means they will have to cut government spending less than expected.

The three parties - Christian Democrats, VVD Liberals and anti-Islam PVV - had pledged to cut spending by €18bn, but are finding it difficult to agree on cutting the healthcare budget and reducing unemployment benefits.

The budget will be formally published on September 21. MPs have already agreed not to hold the traditional debate on the spending plans with the prime minister because of the cabinet's caretaker status.