The cabinet on Thursday rejected calls by Labour MPs to compensate for the 0.25% loss in spending power for middle income households which will result from the government’s budget plans for next year.

Prime minister Jan Peter Balkenende said he had ‘major problems’ with the Labour party’s demand, reported ANP news service. Balkenende repeated that people on middle incomes will benefit from the country’s economic growth over the whole four-year cabinet period.
The prime minister was however more positive about some of the other changes demanded by the coalition parties (Christian Democrats, Labour and ChristenUnie) during the second day of the budget debate.
These include:
* Free textbooks throughout children’s secondary education from 2008 (€130m)
* No cuts in child benefit payments in 2010 (€100m)
* An extra €50m for the defence department in the coming two years
* An extra €40m to alleviate child poverty ovwe the next two years
* Scrapping the proposed €0.01 tax increase for diesel
* More money for healthcare
* An extra €30m for fighting crime
* Another €20m for the fisheries sector
* An additional €20m for regional development
The coalition parties say the extra spending should be paid for from a reserve fund of €250m and by bringing the proposed extra tax on gambling forward by a year which will generate another €200m, says ANP.