Budget criticism ‘noticeably mild’

Reactions to the government’s spending plans for 2009 have been mixed although the tone of the criticism has been ‘noticeably mild’ reports Wednesday’s Volkskrant.

The biggest worry is whether the budget is ‘robust’ or ‘solid’ enough to withstand the current international economic downturn.
Prime minister Jan Peter Balkenende rejected these concerns. In an interview with today’s Financieele Dagblad he said that the budget for next year is a ‘good balance’ between solidarity, limiting inflation, strengthening the country’s competitive edge and responsible development in wage policy.
Meanwhile finance minister Wouter Bos who presented the budget on Monday has admitted that 20% of the €2.5bn cuts in tax and premiums will not be covered financially until 2011, says the FD. The money to pay for the cuts will come from higher taxes for richer pensioners, he tells the paper.
Danger zone – Rabobank
The government’s finances are heading towards the danger zone and there are doubts about just how solid the budget is, Rabobank said in its reaction to the spending plans. The decision to spend just 20% of earnings from natural gas revenues on infrastructure, rather than the usual 40%, is particularly worrying, the bank’s economists said.
Mixed feelings – unions
The CNV trade union federation said it is concerned about the effect of the budget on the spending power of the elderly. Both the CNV and the country’s biggest union federation, FNV, condemned the link the finance minister has made between scrapping the rise in value added tax, cutting jobless benefit premiums and wage moderation. White collar union MHP said it was a budget for employers.
Employers pleased
The three main employers organisations, VNO-NCW, MKB and LTO, welcomed the budget’s emphasis on cutting employers’ and employees’ taxes but also called for a drastic reduction in red tape, in particular to stimulate construction. The MKB criticised the lack of action to solve the country’s traffic problems.
Opposition critical
Mark Rutte, leader of the right-wing Liberal VVD, said the budget lacked ‘vision’ and compared it to ‘cheese with holes’. Socialist Party leader Agnes Kant criticised the lack of solutions for problems in healthcare and education.
Alexander Pechtold, leader of the liberal democrat party D66, said he missed strategic advances on the labour and housing markets, energy and education.
Parliament will discuss the government’s spending plans on Wednesday and Thursday.
For the main points of the 2009 budget, click here
For an English summary of the CPB’s economic forecast, click here

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