Budget talks on target, says finance minister

Work on drawing up next year’s spending plans are on target and proceeding smoothly, according to finance minister Wouter Bos.

The government’s 2010 budget is due to be presented on September 15 – the traditional third Tuesday in the month.
Bos said the ‘good atmosphere’ at the negotiations is because ministers had already worked out a package of measures to boost the economy earlier in the year. In addition, ministers are well aware of the pressure the recession is putting on all aspects of the government’s finances, Bos said.
Nevertheless, some difficult decisions will need to be taken, magazine Elsevier said on its website.
Extra costs
And sources told Elsevier ministers are having to find ways of paying for the forecast swine flu epidemic, as well as increased bills for spending on social security and childcare. In total, ministers face a shortfall of €1bn, the magazine’s website says.
The government has already agreed not to take steps to bring its finances back under control until 2011, which is also election year. Instead, spending in 2010 is to be kept at levels agreed when the new government was formed in 2007.
But according to the Financieele Dagblad, recession busting measures will take the budget deficit to 6% next year.
Spending power
Meanwhile, the government’s macro economic forecasting agency CPB is set to announce that spending power will go down by between one quarter and half a percent next year, sources have told news agency ANP.
Families with one working parent with an income of around €30,000 are set to be hardest hit, with a 1% reduction in spending power, the CPB figures show. The figures are due to be published on September 15.
Despite the recession, spending power went up for most people in work this year. But new figures from the national statistics office CBS on Thursday show households spent 3.1% less in June than they did in June 2008. Spending on consumer durables was down 8%, the CBS said.

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