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Austerity package details leaked, spending power cut by 2%

Thursday 17 May 2012

The five-party agreement aimed at reducing the Dutch budget deficit to below 3% represents extra tax income and spending cuts to the tune of €16bn, the Telegraaf reports on Thursday.

Corrected for the effect of the measures on consumer and industrial confidence, the austerity package will generate €12.2bn for the treasury, according to leaked documents obtained by the paper. The five parties have also agreed €1bn in extra spending.

Although many of the measures were already known, the leak confirms patients will face a €350 'own-risk' charge on their health insurance plus a €7.50 a day fee for hospital stays.

Spending power

The effect of the package on spending power will be around 2% on average, although wealthy pensioners will be harder hit. Families on average incomes will have 1% less to spend.

The government's macro-economic forecasting agency is currently analysing the plans to assess their effect on the government's finances and see if they will succeed in cutting the budget deficit to within eurozone limits.

The three minor parties - D66, GroenLinks and ChristenUnie - agreed to work with the minority coalition to draw up austerity measures after Geert Wilders' PVV pulled out of the talks last month.

Election

The Netherlands is holding a general election in September and a new line-up of MPs will decide how many of the measures agreed by the five-party coalition will actually come into effect.

According to the latest opinion polls, the five parties are not on target to command a majority in parliament.


The main measures at a glance

Taxation:

  • An increase in value-added tax from 19% to 21%
  • First two income tax bands to be cut by 0.4 percentage point
  • Employers to pay an extra 16% tax on salaries over €150,000
  • Tax on tobacco and alcohol to go up
  • Bank tax to be doubled
  • Tax increase on theatre tickets reversed

    Housing market:

  • No tax relief on new interest-only mortgages
  • Help for starters on the housing ladder

    Employment and benefits

  • The state pension age to go up to 66 in 2019 in stages
  • A two-year pay freeze for civil servants and teachers but not hospital staff
  • An end to the tax break on employee travel costs
  • Employers to pay first six months of unemployment benefit
  • Redundancy pay to be maximised at half a year's salary, procedures to be simplified
  • Redundancy pay to be used for retraining and finding a new job
  • Golden handshakes cash over €531,000 taxed at 75%
  • No help with childcare for households earning over €125,000
  • Household income check for benefits to be scrapped

    Healthcare:

  • Own-risk fee to go up from €220 to €350 a year, compensation for low incomes
  • An introduction of a €7.50 a day fee for hospital stays
  • Zimmer frames scrapped from basic health insurance package
  • Patients to pay 25% of hearing aid cost
  • Personal assets to have greater role determining residential care and home nursing costs
  • Cuts on personal healthcare budgets, mental health service fees to be reduced

    Other measures:

  • Football clubs to pay part of policing costs
  • Tax break on green investments to remain
  • Local councils and waterboards to bank with treasury, not commercial banks
  • Animal cops scrapped
  • Court fee increases scrapped
  • Extra spending on public transport, nature and education


    Sources: Telegraaf, RTL nieuws

    © DutchNews.nl



     

    Readers' Comments

    There's no single one example in history of economy, on a country getting out a recession without stimulating domestic consumption firstly. As we can see now, while US or Japan are growing, we are in recession, due to one of the most harmful governments (Rutte-Wilders period) we have suffered in our country.
    The only sensible vote in interest of our economy, in coming election, is in favor of parties that propose a new and completely different approach, following the path from new French government and the way, that all schools of economy teach, all over the world. Quick and strong investment, to growth. Leaving foolish superstitions, whithout any rational support, like 3%-by-2013.

    By zenplus | 17 May 2012 11:04 PM

    Quite logical, considering the economic situation and priviledges being provided to people...no austerity measure is liked by everyone...

    By Biz | 18 May 2012 5:47 AM

    Soon all these laws will not even be able to be implemented, the people all over Europe have had enough & there will be a civil uprising.

    Why don't we see cuts to foreign aid & cuts to immigrants welfare that have paid no taxes or no welfare for immigrants for the first 10 years, no pensions for immigrants unless they have worked for 40 years in the NL? Instead older Dutch people have to work for longer whilst people that have never paid any tax get a free ride.

    Do people realise the extent of the welfare dependency problem with people from overseas?

    By Phil | 18 May 2012 6:11 AM

    Of course as the Dutch are currently net EU contributors of 4.7 billion euros, they could take care of 1/3 of these cuts instantly.

    By Scott Campbell | 18 May 2012 1:21 PM

    @Phil: The extent of the "welfare dependency problem with people from overseas" (where are you referring to anyway?) is overly exaggerated and nowhere near as dire as you paint it to be. Why do you hate people different than you so much?

    By Stupid | 18 May 2012 5:49 PM

    If you change the word 'leaked' to 'given', it would make a lot more sense considering the looming September elections!!

    By The visitor | 19 May 2012 2:12 AM

    @Phil...Shhh! You can't say that on here, immigration is only a great thing that makes Holland a better place, you can't mention the reality of what immigration REALLY does to the economy.

    By B Bremner | 21 May 2012 2:50 PM

    " Why don't we see cuts to foreign aid & cuts to immigrants welfare that have paid no taxes or no welfare for immigrants for the first 10 years, no pensions for immigrants unless they have worked for 40 "

    Because over 40 years ago you stole their countries you rascist dolt - that's why!!

    By The Equalizer | 21 May 2012 3:40 PM

    What, B Bremner?? As an immigrant (as many of us are here), I'd love to know!!

    Of course, you WILL provide supporting statistics...

    By CW | 21 May 2012 4:28 PM

    Footbal clubs to pay part of policing costs? I thought clubs paid all the costs!
    They should pay 100%.
    Phil, re the pension idea. By the time I retire I will have lived here for 26 yrs. If it were based on being here 40 yrs I would lose half my pension despite paying taxes here from 2002.

    By Donaugh | 21 May 2012 7:05 PM

    "Do people realise the extent of the welfare dependency problem with people from overseas?"
    I do. I also realise the extent of the welfare dependency problem with people from the Netherlands - have you seen D66' report that says that the Dutch are the society that works the least in the entire industrialised world? Freeloading is not a race or country issue.

    By Alice | 22 May 2012 9:13 AM

    @The Equalizer...well 70 years ago the Germans invaded us and stole Holland, should they not pay then? Or the French because of Napolean? Or lets go back even further and sue Sweden for the Viking pillaging Europe! Someone puts an idea forward and you bring out colonialism and accusations of racism, great forward thinking debate.

    By B Bremner | 22 May 2012 11:43 AM

    @CW: The policy whereby you can apply to bring elderly depandants to the Netherlands puts a strain on services and costs extra in pensions which has not been paid for in working taxes. Logic not a statistic.

    By B Bremner | 22 May 2012 11:48 AM

     
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