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Income effects of revised coalition deal 'less extreme' figures show

Friday 16 November 2012

The effect of the government's revised economic strategy for the coming four years will still have an impact on spending power but the net effect will be 'less extreme', calculations from the family spending institute Nibud show.

The new government was forced to drop plans to make health insurance income-dependent following widespread public outcry over the effect on incomes. Instead the government is now planning to tinker with income tax in an effort to reduce the gap between rich and poor.

But even though middle-income families will be less hard hit, they will still bear the brunt of the changes, the Nibud figures show.

Pensioners

For example, a single person earning €75,000 a year will see their spending power shrink by just over 2%, rather than over 8% under the earlier plans.

However, people who have retired early will still be hard hit, seeing their disposable income go down by almost 16%. And pensioners with a private pension will also be affected, with some losing over 10%. Single parents on welfare will also lose out.

However, Nibud stresses the reality may be different depending on other government measures and economic developments.

Freelancers

The figures do not analyse the likely impact of the measures on the self-employed, a fact which has angered freelancer lobby groups.

The new government plans to scrap a tax break for freelancers which means they will all be worse off, lobby group ZZP Nederland said. The Netherlands has some 730,000 people who are self-employed.


Are we too obsessed by spending power? Have your say using the comment box below.

© DutchNews.nl



 

Readers' Comments

Spending power is vital in our current paradigm of economics because if consumers don't spend, the economies suffer and the politicians look bad. There must be other measures that could be used in addition, to forecast effects of these cuts and give a clearer idea of what the cuts really mean for people.

By YesIAm | 17 November 2012 10:54 AM

How can this possibly be less extreme? The people at the lower rungs of the income table look to have a very bad time of it, while the higher rungs will probably notice little change. Something smells rotten and it's not in Denmark. Time to get out there and fight for our rights.

By Al | 18 November 2012 11:32 AM

Glashelder, the working man and the pensioners pay for the bank bailouts. How predictable?

By Highlander | 19 November 2012 1:36 PM

 
 
 
 
 
 
 
 
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