Dutch government presents budget cutting jobs and social benefits; more austerity to come

Dutch government to cut benefits in 2011

AMSTERDAM — The Netherlands’ queen and the outgoing prime minister presented an austere annual budget on Tuesday that slashes government jobs, spending on immigrants, and tax breaks for families — a foretaste of more far-reaching cuts likely to come under the conservative Cabinet now being formed.

At the start of an afternoon full of ceremonies, rituals and conspicuous hats, Queen Beatrix rode through the streets of The Hague in her gold-trimmed horse-drawn carriage, waving to tens of thousands of fans who lined the route leading to the 13th-century Hall of Knights.

The event was disturbed briefly by a 29-year-old Dutchman who threw a wax candle holder at the Queen’s coach and was quickly tackled by police. Hague police spokesman Wim Hoonhout said on NOS television the man’s motive was not known. Nobody was injured. The queen appeared unaffected and began an address to both houses of Parliament shortly after the incident.

In her speech, she outlined the government’s plans for the year ahead — despite the lack of a new Cabinet 104 days after national elections.

“A far-reaching package of cuts is necessary now to improve the position of our country in the long term,” Beatrix said, reading a text written by outgoing Prime Minister Jan Peter Balkenende.

Balkenende’s budget targets euro3.2 billion ($4.2 billion) in cuts from the government’s current level of around euro270 billion in spending by 2015, reducing the deficit to 3.9 percent of economic output next year.

Those cuts are likely to be overshadowed by the new government still in coalition-building talks, which is targeting a more rigorous euro18 billion in reductions over the same period.

The Cabinet under negotiation includes the two traditional conservative Dutch parties, with outside support from the anti-Islam Freedom Party. But Balkenende’s budget focused squarely on economic issues rather than the debate over Islam and immigration that has dominated Dutch politics for the past decade.

His budget includes plans for reducing the amount of money spent on integrating immigrants, mostly through mandatory language and citizenship classes. He will also cut 4,000 government jobs and reduce a tax break given to working parents with children in daycare.

With politicians deadlocked over reforms to the country’s pension system since before the election, 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 to 67 in 2025.

The incoming government hopes to effect those increases more quickly.

“To assure coming generations of a good pension after an industrious life, an increase in the pension age seems reasonable,” Beatrix said, sidestepping the debate.

The Dutch economy is relatively healthy, with 1.5 percent growth forecast in 2011 and unemployment expected to fall to 5.5 percent.

There was a heavy police and military presence in The Hague Tuesday since recent appearances of the Royal Family have been plagued by disturbances. The most notable came in April 2009, when an unemployed loner targeted Beatrix and her family in an assassination attempt on the Queen’s Day national holiday.

The man came within meters of slamming his car into an open-topped bus carrying the royal family before he swerved into a stone monument, killing himself and seven innocent bystanders.