‘Protect spending power of poor’

Opposition parties and trade unions are demanding that the cabinet protects the spending power of those on the lowest incomes next year, saying that it unacceptable that this group should suffer when the economy is doing so well.

The call for government action follows leaked figures from the social planning agency (CPB) on Wednesday that consumer spending power is set to decrease by 0.5%, double the figure originally forecast.
For the elderly and people on minimum incomes, the loss in buying power could rise to 1% and the poorest pensioners could be even worse off unless the cabinet takes action.
The fall in consumer power is due partly to higher healthcare premiums and taxes and lower-than-expected wage rises.
According to ANP news service, the cabinet is considering compensation measures but has not yet decided how these will be paid for. Ministers were due to continue talks on Thursday.
Mark Rutte, leader of the main opposition Liberal VVD party, wants the finance minister to make sure ministries cut spending so that taxes and premiums can be lowered, reports ANP.
And GroenLinks said it is clear that those on higher incomes will have to compensate for those on low and average incomes. Those on the lowest incomes must be better off next year while households with an average income must at least see their spending power remain stable, the party said.
The trade unions share this opinion and a spokeswoman for the FNV federation said the cabinet only has itself to blame for the situation because, for example, of the higher taxes it plans to introduce. The pensioners union ANBO calls the fall in spending power ‘too crazy for words’.
The new consumer spending figures was on the agenda at the first meeting of the cabinet after the summer holidays on Wednesday but ministers were tight lipped about what was discussed.
Finance minister Wouter Bos declined to confirm or deny the leaked figures while social affairs minister Piet Hein Donner said only that the cabinet would ‘do what was necessary’ and would announce what this was when it presents its annual budget on September 18.

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