September 19, 2007	Wednesday	Ramazan 06, 1428

THE HAGUE, Sept 18: The Dutch centre-left government presented its 2008 budget on Tuesday and forecast a surplus in the public accounts for the next four years.

“With a booming economy, the Netherlands is one of the most prosperous countries in the European Union. Despite recent unrest in the financial markets the economy will remain strong in 2008 and will provide further growth of employment,” the finance ministry said in the budget.

In 2007, the economy is expected to grow by 2.75 per cent and in 2008 growth in gross domestic product (GDP) is forecast at 2.5 per cent.

In 2008, the Dutch state is counting on a budget surplus of 0.5 per cent of GDP that will rise to 0.6 per cent in 2009, 0.7 per cent in 2010 and reach 1.0 per cent in 2011.

Inflation will rise mildly from 1.75 per cent this year to 2.0 per cent in 2008, the government said.

“It is a fact there is tension on the labour market and that always has an increasing effect” on inflation, Prime Minister Jan Peter Balkenende said.

The national debt will be at 45 per cent of GDP in 2008, calculated according to European Union norms, and the government plans to reduce it further to less than 40 per cent in 2011.

In the eurozone, the average national debt level is 65 per cent of GDP.

The Dutch budget is traditionally presented on the third Tuesday in September when Queen Beatrix reads the speech from the throne to present the government’s plans for the next year.

“To foster a cleaner and more efficient economy, the government is raising taxes on consumption and on environmentally harmful activities,” the queen said.

The budget includes plans for a new tax on plane tickets -- 11.50 euros for short flights and 45 euros for longer trips -- that is predicted to earn the government 350 million next year. The government will also raise taxes on tobacco and diesel fuel.“All these measures in conjunction mean that many people’s purchasing power will not rise in 2008,” the queen said.

In all, the budget foresees a 6.8 per cent rise in taxpayers regular expenses but the government stressed that most of that will go to financing the national health care system.

The government is also hoping to further lower the already low unemployment from 4.5 per cent this year to 4.0 per cent in 2008.

The obligatory contribution of employees to the national unemployment insurance will be gradually reduced and eventually dropped.

To compensate, the government plans to raise value added tax (VAT) to 20 per cent in 2009, up from 19 per cent now.—AFP