Coalition parties clash over btw delays

The two main coalition parties – the Christian Democrats and Labour – clashed in parliament yesterday over cabinet plans to delay the planned increase in value-added tax (btw).

Finance minister Wouter Bos (Labour) wants to postpone the increase from 19% to 20% until 2010, because of its negative effect on spending power and inflation. But this means plans to end the payment of unemployment benefit premiums by workers will also be delayed – which the CDA opposes.
CDA MP Frans de Neree accused Bos of ‘causing a disaster’ by scrapping the unemployment benefit plans. And Labour MP Paul Tang said the CDA was writing ‘cheques with no guarantees’ by suggesting the premium could be scrapped without the increase in btw. According to the Telegraaf, the whole process involves some €2bn.
The cabinet will take a final decision on delaying the btw increase in August, ahead of September’s budget.
During the debate, the three coalition parties’ suggestions for spending a €150m treasury windfall also came up for discussion. Labour wants to use €50m to boost spending power for minimum income households, the CDA wants to spend €50m renovating listed buildings, and the ChristenUnie €50m on helping teenage mothers and women leaving prostitution.
The opposition parties were scathing of the way the three parties had divided up the cash. It is a ‘national present-giving day’, said GroenLinks MP Kees Vendrik.

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