Budget: difficult choices in 2011, minister

The government is to set up 20 special commissions to examine all areas of government policy with a view to cutting some ministries’ spending by up to 20% in the future, finance minister Wouter Bos confirmed on Tuesday.

‘Difficult choices with painful consequences’ will have to be made, Bos said, in his annual financial statement to parliament.
Bos said spending will have to be slashed from 2011 onwards to get the government finances back on track. By next year, the government finances will face a shortfall of €40bn, requiring drastic cuts, the minister said. But major cuts are not on the table for 2010 in order to stimulate the economic recovery.
By delaying major cutbacks for a year, the government hopes to establish a ‘broad social and political debate’ next year on how to proceed.
The decisions which have to be made should be taken by as many people as possible, the Labour minister said. ‘Everyone understands that bills have to be paid at some point.’
No areas of government policy are exempt from scrutiny, he said.
Spending power is set to fall slightly next year by just 0.25%, the finance minister told MPs. Inflation will remain low, at around 1%. The economy will shrink 4.75% this year and there will be no movement at all in 2010, Bos said.
The Netherlands needs to deal with a number of ‘fundamental political considerations’ and work out ‘how we can ensure the Netherlands is cleaner, more intelligent, stronger, more robust and shows greater solidarity, albeit with possibly fewer resources,’ the minister said.
After his speech, Bos dismissed claims that the government was delaying difficult decisions until after the 2010 local elections and general election in 2011.
The recession also offers the opportunity for everyone to be involved in making fundamental choices, Bos told reporters.
Suggestions that the government was considering introducing compulsory wage moderation if unions and employers did not toe the line were unfounded, he said. ‘It has not been a topic of discussion,’ the minister stated.

DutchNews.nl will publish a detailed list of specific measures for next year on Wednesday morning.

For an official summary of the budget, click here
For the finance ministry statement, click here
For more on the finance ministry’s tax plans, click here

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