June - July 2013 - Association of Dutch Businessmen

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Bizz News Economic downturn knocked €11bn off expected treasury income The economic downturn meant the government collected less tax than expected in 2012, according to the national accounts. The shortfall amounted to €11bn, pushing the budget deficit up to 4.1%. This is ‘directly attributable to lower growth figures’, the finance ministry said. The downturn affected all forms of tax, from income tax, corporation taxes, value added tax and the tax on house sales. The shortfall was partly offset by a €2.6bn bonus in the form of lower government spending. In total, the government spent €24bn more last year than it generated - the equivalent of €67m a day. The European Commission said it is giving Netherlands until 2014 to get its budget deficit under control, a year past the original deadline. European commissioner Olli Rehn told a news conference the current deficit is due to the nationalisation of financial services group SNS Real and ‘economic conditions which are more serious than expected’. ‘That leads to changes in the recommendations; the deficit should be reduced to under 3% in 2014,’ Rehn said. This means further cuts will be inevitable, commentators said. More workers are worried about their job The number of workers worried about their job has doubled to 32% since 2007, the year before the financial crisis began. The figures from research institute TNO and the central statistics agency CBS show that the number of people worrying about job security has increased nearly every year since 2007. In 2012 the increase was 6% year-on-year. The 50 to 60-yearolds are the biggest worriers - with 40% saying they fear for their jobs. But they are also most likely to be happy at work. Three-quarters enjoy their jobs, compared with 67% of workers as a whole. The oldest and youngest workers are least concerned about their employment. Some 23% of the over 60s worry about losing their job and of those under 20, just 17% are concerned about job security. Dutch unemployment rate outstrips Germany The unemployment rate in the Netherlands is now higher than that of Germany, reversing the situation which has existed since the fall of the Berlin Wall, according to research by national statistics office CBS. Calculated according to international standards, the jobless rate in the Netherlands is now 6.4%, compared with 5.4% in Germany, the CBS said. By its own calculations, the Dutch official unemployment rate is now over 8%. The main reason for the shift is that the German economy continues to grow, while the Netherlands is in recession. In Europe as a whole, the unemployment rate is over 12%. Health ministry overspent budget by €900m last year The government was €900m over budget in its spending on healthcare last year, according to the national accounts. This follows a €2bn overspend in 2011. Overspending on residential healthcare accounted for the bulk of the extra – at €662m. But the budget for medicine and medical aids showed a surplus of €930m. Financial shocks loom for thousands with investment policies Tens of thousands of people with an investment policy to pay off their mortgage or provide a pension have no idea if the policy will actually generate enough cash, said the financial services regulator AFM. One in five of some one million policyholders do not know if their investment will generate enough money when it matures to meet their financial obligations. And of the 800,000 who are on top of their financial situation, three-quarters expect to get less money from their policy than expected, the AFM’s latest consumer survey shows. Stock exchange The economic downturn means many investment policies are likely to produce much lower returns than expected. And even though financial service firms have to update their clients every year, many people are still not aware of their own situation. The AFM is also urging financial service firms to alert clients who may be in difficulty and to recommend steps they can take to make up any shortfall. The nearer a policy is to maturing, the more difficult it will be to bring it back up to the expected financial return, the AFM says. 22
Bizz News IMF chief welcomes Brussels’ approval for Dutch budget deficit delay The decision by Brussels to give the Netherlands an extra year to reduce its budget deficit to under 3% is a good one, according to Christine Lagarde, head of the International Monetary Fund. European commissioner Olli Rehn said that the Netherlands had until next year to ensure its budget deficit meets eurozone rules. ‘It is important the Netherlands meets European budgetary rules but people should not hurry unduly. I am very pleased with the European Commission’s decision to give countries more time,’ she said. However, cuts in spending are not enough, Lagarde said. The Netherlands should make it easier to start a company, more must be invested in research and development and the problems in the housing market need solving. Free public transport for poor Amsterdam pensioners Pensioners in Amsterdam with an annual income of no more than €15,112, will be able to travel free on the city’s public transport system from September. The free transport experiment will run until the end of the year. Pensioners, whatever their income, already have free public transport in several other cities, including Dordrecht, Rotterdam and Nijmegen. One third of housing corporations forego higher rent increase Around one third of housing corporations have not given an extra rent increase to high-earning tenants because they have not had enough information from the tax office, according to the sector’s umbrella organisation Aedes. A survey of half of the country’s 400 housing corporations showed around one in five requests for information about which income band a household fell into were not met. Two weeks ago, housing minister Stef Blok said the tax office did not know the income of around 5% of tenants and most of the problems have been solved. The three million people living in social housing with a current rent of up to €681 a month face an increase of at least 4% this year. Tenants with an annual income over €33,614 have been given a 4.5% increase and those earning over €43,000, a 6% boost. Rents will rise again by the same percentages next year. According to the tax office, around 25% of all housing corporation tenants have a household income of more than €33,000. Technically this means they are too well-off to qualify for rentcontrolled housing. Tens of thousands sign up for Dutch mission to Mars The Dutch company which claims to be planning to establish a base on Mars said 78,000 people have so far applied to join the mission. The Mars One group aims to establish a colony on Mars in 2023 and has appealed for volunteers to make the one-way journey. ‘We are on target to achieve our target of 500,000 applications,’ spokesman and company founder Bas Lansdorp said. The deadline for applications is August 31. Many of the applications, in the form of a one-minute video clip, can be seen on the Mars One website. Most applications have come from the US, followed by China and Britain. The company says the applications will be whittled down to a shortlist of 28 to 40 in 2014. The winners will then undergo a seven-year training programme and the final team will be chosen by public vote. Despite much scepticism, Mars One says it has developed a realistic road map and financing plan for the project based on existing technologies and that the mission is perfectly feasible. Much of the funding would apparently come from the broadcast rights. Inflation fell in April The Dutch inflation rate dropped from 2.9% in March to 2.6% in April, according to figures from the central statistics agency CBS. Much of the improvement came from a drop in petrol prices, which fell by 7 cents to an average €1.74 a litre. However, inflation remains at a 10 year high due to increases in energy prices, the introduction of insurance tax and the rise in valueadded tax (btw). The Netherlands still has one of the highest inflation rates in the eurozone, says the CBS. Councils fail to cut spending on jobless officials Efforts by local councils to curb the special unemployment benefits paid to politicians are failing. Despite tougher rules, the 30 biggest Dutch local authorities spent more than €4m last year on payments to former council aldermen. Apeldoorn has the biggest bill – paying out €675,000 last year, an increase of €200,000 on 2011. The situation in Rotterdam and Amsterdam last year is still unclear, the paper said. In 2011, Rotterdam spent €220,000 on the benefit, known as wachtgeld, or waiting money. Amsterdam spent more than €2.7m. The new rules say people who have held political office will now receive benefits for a maximum three years, two months – the same length of time as unemployment benefit is paid. Until now they have had benefits for four years. 23
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