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Balkenende presents measures to tackle crisis

News item | 26-03-2009

In a statement to the House of Representatives, Prime Minister Jan Peter Balkenende outlined the government's plans to 'invest heavily in the Netherlands' future'.

A stimulus package totalling 6 billion euros has been developed for the short term. Measures have also been drawn up for restoring public finances and implementing much-needed reforms.

The global economic crisis is confronting the Netherlands with a major challenge, said Mr Balkenende. Jobs and incomes are under pressure, companies are in difficulty and the national debt is rising fast.

This not the time for giving up but for working together, he said. That is why the government has sought dialogue with the social partners.

The government has decided to go ahead with its spending plans for the next two years. This will boost consumption and the economy by 50 billion euros in 2009 and 2010.

Stimulus package

The government's stimulus package for 2009 and 2010 is worth a total of six billion euros.

Work and economic activity
The government 'will do everything in its power to stimulate economic activity and ensure that as many people as possible keep their jobs,' said Mr Balkenende. Part-time unemployment benefit will help to achieve this.

Where job losses are unavoidable, retraining schemes will ensure that those affected can find a new job quickly. The government will give top priority to preventing youth unemployment.

Clean and innovative economy
Investments are to be made in sustainability, energy security and innovation. Proposals include a scheme for scrapping old cars and for insulating homes.

Infrastructure and construction
The government is to bring forward maintenance plans for roads and waterways. Money will also be spent on improving schools and hospitals or building new ones. Procedures will be accelerated so that businesses and private individuals can start construction projects more quickly.

Company liquidity
The liquidity of companies connected with Schiphol Airport will be raised. This will involve abolishing the flight tax.

Restoring public finances

Mr Balkenende said that all the measures for restoring the economy in the short term are very costly.

The extra investment will come on top of the 80 billion euros already spent on restoring confidence in the banking sector. The government's decision to leave its spending plans for 2009 and 2010 intact will cost another 50 billion euros.

'These decisions are necessary and defensible given the economic situation,' said Mr Balkenende.

To put public finances on a sound footing again, the deficit will be reduced by at least 0.5% of GDP a year, starting in 2011. The government's agreements on this matter will be laid down in an Act of Parliament.

Reforms

Dutch people must be able to count on good health care, good education and a good pension for the next 10, 20, 30 or 40 years, said the Prime Minister.

'Here, too, we all need to do our bit,' he said. 'That is why we intend to raise the state pension age to 67.'
 
The government wants to do more to control healthcare costs. In addition, people who own a home worth one million euros or more will have to pay more tax on it.

'The reforms are necessary and fair,' said Mr Balkenende. 'But we realise that they will have far-reaching effects. That is why they will be introduced gradually, beginning in 2011.'

After delivering his statement, the Prime Minister held a press conference with deputy prime ministers Wouter Bos and André Rouvoet.

See also

• Supplementary policy agreement