Lessons on stimulating the economy from the Dutch Government for Gordon and Alastair - and David and George
Some people might think that the Dutch scheme announced on Friday to stimulate their economy might possibly of interest to the double firsts in the Treasury, Bank of England and even the less well educated - ie those educated at Scottish Universities.
The Dutch government announced a €6 Bn. package of measures : Prime Minister Jan Peter Balkenende said that it is ‘all hands on deck’ as the country moves into a difficult economic period. the Netherlands has the lowest jobless rate in the European Union.
1. This would put a smile on every industrialists face and massively improve compamy liquidity without the need to extend borrowing unduly. The most significant measure in the package is the re-introduction of accelerated write-offs on investments for businesses, which is expected to generate €2 Bn. tax benefits for companies.
2. Ditto : Firms that have to lay-off workers or introduce shorter working hours as a result of the credit crisis to use the unemployment benefit fund to pay employees for up to 24 weeks. Some €200 Mn. is available for this.
3. The government will also make sure that it pays its bills to businesses on time.
4. In an effort to stimulate consumer spending, the lock-up on employees' tax-free savings schemes will be lifted. Under current regulations money invested in this scheme cannot be accessed for four years. You see, all those years of thrift pay off at times like this.
5. Speeding up building procedures to help the construction sector and bringing investments in infrastructure projects forward, this would include the new Delta flood control works.
6. Introducing regional mobility centers to help prevent imminent layoffs.
This aid package is the equivalent of around 1 % of the gross national product and pre-empts a rescue plan currently being prepared by the European Union for all member states.