Dutch economy on course despite turbulent times

The 2009 Budget Memorandum shows that the Dutch economy is in good shape despite global economic turbulence. Although the Netherlands has not been left unscathed and its economy is cooling, the national budget shows a surplus, the government’s plans are being implemented, purchasing power is being maintained, employment is being promoted, and innovation and profitability are being stimulated.

The government will consult employer organisations and trade unions on how to boost employment and other lasting ways of strengthening the economy. In this context, the government is willing to scrap employees' unemployment insurance contributions if the social partners keep pay rises within reasonable bounds. This means that people on an average income will see their take-home pay rise by about €500 a year. For working parents, the figure could be as high as €800. The government also plans to introduce a bonus for people who continue working after reaching the age of 62. By making work more financially attractive, it is promoting employment. It has shelved its plans to raise VAT. This will mainly protect the purchasing power of older workers and those on low incomes and will help to avert a wage-price spiral. Many people will be better off next year.

The government will continue to pursue its aims as set out in the coalition agreement. In 2009 it will continue to invest in education, sustainability, community regeneration, and public safety and security. Among other things, it will spend more money on tackling school dropout and preparing pupils for the job market. During its present term of office it will spend an extra €300 million on the communities action plan. It is also taking measures to reduce the crime rate by increasing the likelihood of catching those responsible. By 2011 there will an extra 500 community police officers on the beat.

The coalition agreement states that the government will aim to achieve a structural budget surplus of 1% of GDP by 2011. Halfway through the government's term of office, this still appears to be a realistic goal. In 2009 the actual surplus is even expected to reach 1.2%, mainly thanks to higher gas revenues. The national debt is expected to be about 40% of GDP in 2009. By the end of the government's term of office, it is expected to have fallen to its lowest level in percentage terms since 1815.