Everyone will be aware of the far-reaching measures the caretaker government is taking to bring the government finances under control, finance minister Jan Kees de Jager told parliament on Tuesday.

De Jager presented the budget on a tablet, as well as the traditional briefcase this year. Photo: WFA
‘The financial crisis will not go away,’ De Jager said. ‘People are right to be worried about their jobs, the housing market. Growth expectations over the next few years are modest… we are all going to feel it.’
The credit and debt crises have affected the economy so deeply the budget deficit has to be cut and reform is vital. The five-party agreement reached in April will reduce the budget deficit back to 2.7%, in line with eurozone rules, he said.
Spending power
According to the government’s macro-economic forecasting agency CPB, the effect of the spring austerity measures will be to reduce spending power by an average 0.75% next year, on top of a 1.75% drop this year. The economy will shrink by 0.5% this year and grow by 0.75% next year, as the cuts begin to take affect., the CPB said.
Unlike in previous years, the measures the cabinet is planning to take are already in the public domain and some, such as the increase in value-added tax to 21%, have already been passed by both houses of parliament.
Nevertheless, a number of measures, such as a tax on travel expenses, remain controversial and may not become law.
Balance
Speaking after the presentation, De Jager said if the new government wants to drop some of the measures, it will have to find alternatives to make sure the books still balance.
Prime minister Mark Rutte reiterated that point: ‘If you want to get rid of it, you need an alternative,’ he said, adding this rule will apply to both parliament and the new coalition. ‘The strength of this budget is it sets the tone, it forms the basis,’ he said.

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