Budget: ministers focus on spending power

The government’s budget talks are to focus on making sure that at least pensioners and people on minimum incomes are not worse off next year, various media report on Thursday.

Ministers met yesterday for the first discussion on spending plans for 2009. It was their first meeting since the summer break and a series of bad economic news.
Earlier this week, the government’s economic policy unit CPB warned that economic growth is set to slow and inflation to rise to 3.8% next year.
And on Thursday, news agency ANP said confidential CPB figures also show a slight rise in unemployment, to 4.5%, next year, after years of decline.
In addition, the cabinet has been confronted with an extra €300m overspend on childcare, despite measures taken before the summer to reduce the bill, according to various newspaper reports.
No decision has yet been taken on delaying the rise in value added tax (btw) to 20%. A delay would mean a €2bn shortfall for the treasury.
Christian Democrat ministers are still holding firm on plans to scrap employee unemployment benefit premiums (WW) which would leave a €2bn gap in the government’s finances.
Labour ministers want a delay to cover the btw shortfall. Finance minister Wouter Bos is now looking at alternative ways to raise cash, ANP says.
The government’s 2009 spending plans will be presented on September 16.

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