Dutch budget deficit will be smaller than forecast in 2011, papers say, citing leaked report

Report: Dutch budget better than forecast in 2011

AMSTERDAM — The Dutch government’s budget deficit will be 3.9 percent of economic output in 2011, better than the 4.7 percent deficit forecast as recently as June.

RTL Nieuws has published documents due to be released next week with the government’s annual budget. Reasons for the improvement include cost-cutting by outgoing government of Prime Minister Jan Peter Balkenende, and better-than-expected unemployment figures, which will reduce welfare costs and boost tax revenues.

Unemployement has declined for the past six months here. It is now forecast at 5.5 percent in 2011, versus an expected 6 percent, and the economy is expected to grow at 1.5 percent, just a hair under current expectations, RTL said.

In a separate leak, newspaper De Volkskrant said 4,000 government jobs will be cut, and tax breaks for childcare will be reduced.

In a third leak, newspaper De Telegraaf reported plans to increase police fines by 15 percent for a wide range of offenses, including speeding and failing to clean up dog waste.

Balkenende said Thursday commenting on the leaks would undermine next week’s presentation. The Royal Information Service, which speaks for Balkenende, said in a statement that the leaks did not appear to encompass the entire budget — as they have each year this decade, to Balkenende’s irritation.

His centrist Cabinet is likely to be replaced by a strongly conservative coalition next month. Balkenende planned euro3 billion ($3.8 billion) in cuts by 2015, while the incoming government wants to cut euro18 billion.

Parliament has scrapped its traditional debate with Balkenende after the budget presentation Tuesday on the grounds that he has said he will leave politics when the new government is installed.

With politicians mired in coalition negotiations since national elections in June, Dutch labor unions and employers’ associations have agreed on their own accord to raise the national retirement age from 65 to 66 in 2020 and 67 in 2025.

It is not yet known whether the incoming government will attempt to effect those increases more quickly.