Budget leaked: health, education spending cut

The cabinet is planning to cut spending on health, education and social security next year in an effort to stop the budget deficit mounting further, RTL News reports, quoting leaked government papers.

The tv news programme says it has obtained copies of the government’s 2010 spending plans which are due to be published on Tuesday. Advance copies were circulated to political party leaders on Friday.
The documents warn that spending will eventually have to be slashed by €35bn to get the government finances back on track.
Budget deficit
The budget deficit this year and next is set to total 11% of gross national product RTL said. The economy is set to shrink 4.75% this year and not grow at all in 2010.
‘One thing is clear: after the crisis we will have to deal with difficult problems, namely the labour market and government finances,’ finance minister Wouter Bos says in his financial statement, also leaked by RTL. ‘Doing nothing is not an option. Difficult choices are unavoidable.’
Unemployment will grow to 8% by the end of 2010 and spending power fall by 0.25% on average, the documents show. But economic affairs minister Maria van der Hoeven warns that people with higher incomes will be hit harder, as will those who lose their jobs. ‘Their spending power will be less promising than the statistics suggest,’ the minister is quoted as saying.
Broad debate
Ministers are expecting ‘a broad debate’ about the long-term consequences of the recession.
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 by 2020,’ the documents state.
As leaked earlier, a committee of senior civil servants has been set up to look at possible cuts of up to 20% in some ministries’ spending from 2011 onwards. There are to be ‘no taboos’, with mortgage tax relief, child and housing benefit, development aid and education all up for serious review.
Next year
Next year, the health ministry – among one of the biggest spenders – is to cut spending on mental health services and medical specialists. Hospital emergency departments are to be told to charge patients who could have gone to their family doctor.
Spending on education is set to be cut by €140m next year and €427m in 2011. Students grants are to be frozen at this year’s levels.
The social affairs ministry is to save €400m next year, largely by slashing spending on reintegrating the long-term unemployed.
Mark Rutte, leader of the opposition Liberal party VVD, told Nos radio that the plans show the government has had its day. And he dismissed the idea of a broad social debate about the fundamental choices facing the country. The cabinet should be making decisions and coming up with solutions, he said.
The cabinet (a coalition of Christian Democrat, ChristenUnie and Labour) is procrastinating and acting more like a think-tank than a government, Rutte was quoted as saying.
MPs cannot officially comment on the government’s spending plans because they have been given copies of the budget under embargo until Tuesday afternoon.
Hot air
Former finance minister Onno Ruding told Nos tv the measures planned by the government are ‘hot air’ and ministers should have shown far more drive.
Top economist Sweder van Wijnbergen told Elsevier magazine the plans are ‘pure hysteria’.
‘They are stressed out in The Hague,’ he was quoted as saying. ‘There is no reason to take these draconian measures. Something has to be done but with this, the government is creating its own economic contraction.’

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