What do you think of the new dutch crisis management package?

[ProPain]

Well, after waiting for almost a month it's finally here: The measures our government proposes to fight the crisis. Very much wondering what everybody thinks about it.

My opinion:
- increasing the pensioners age from 65 to 67. I think this is absolutely necessary to keep the pensions payable in the future. I think the unions are making a big mistake fighting this measure and I think the government made a mistake keeping this point under discussion instead of just pushing it through now.

- increasing the 'huurwaardeforfait' (extra taxes you pay for owning a house, reasoning behind is you don't pay rent over you bought house and so can pay more taxes) for houses worth +1 million euro. Symbol politics at it's best, this won't be the hen with the golden eggs.

- abolishing airport tax. Again, very much symbol politics. Personally I don't believe Schiphol claiming that a lot of people are now booking flights from Germany/Belgium.

- Subsidising scrapping your old car and buying a new one. This totally puzzles me. They selling this as an environmental measure: new cars, cleaner air. I think it's utter crap. We might as well send the money reserved for this measure directly to Germany/France/Japan as their car manufacturers will benefit most of this.

[Matrix]

Two things: the way democracy has been put aside is seriously not done, IMO. Yet I can imagine they feel to have no other choice, since the opposition is a mockery. They only yell, and have absolutely no vision. Save D66; they're the only ones with productive feedback.

Concerning the content, in general I think they're doing the right thing: invest now, despite the effect on the budget, and repay later. But we will have to repay, and one can foresee the criticism they will have in 2011 from the unions. It's not gonna be pretty. At least it cannot be, if they're really gonna compensate.

With regard to the details:
I think increasing the pensioners age is necessary, because most people are well able and willing to work after their 65th birthday nowadays, but I wonder how much effect this will have on the economy. It'll increase so slowly (one month per year, right?) that only the tail of the babyboom (at present 37-62 years old) will have to work till they're 67. In any case, it will not have any effect on the current economic crisis. So why present it as a remedy for this crisis?

Abolishing airport tax is contradictory with their ambition to invest in sustainable development, but whatever. The effects are slim on both ends, so I agree with you, ProPain.

"Subsidising scrapping your old car and buying a new one. This totally puzzles me. They selling this as an environmental measure: new cars, cleaner air. I think it's utter crap."
Why is it utter crap? New cars are more clean and more efficient...

Subsidy on the isolation of houses: fine. Increasing "huurwaardeforait": sure. But what are they doing about the housing market? The housing construction is practically quenched, while we already had a shortage of houses and the population still increases steadily till 2040 to approx. 17½ million. Is this their solution to compensate the drop of house prices?

I think Marianne and I are quite lucky that we bought a house half a year before the crisis hit the Netherlands. The prices didn't drop in the city of Groningen, as an exception, and now it would've been much harder to get a mortgage.

[Aggie]

Originally Posted by Matrix

Concerning the content, in general I think they're doing the right thing: invest now, despite the effect on the budget, and repay later.

Invest? Were do they invest? The government is losing billions and billions because they have to pay more unemployment wages, get less tax income and less income from our gas because of the low oil prices. That is no investment, but simply loss of money.

That they decide not to cut government costs to mend the situation has nothing to do with investment. The 17 billion that they DO invest is laughable. Also they should have put more money in efforts to change our economy, like Obama does in the US.

[Shabbaman]

Originally Posted by Matrix

I think increasing the pensioners age is necessary, because most people are well able and willing to work after their 65th birthday nowadays, but I wonder how much effect this will have on the economy. It'll increase so slowly (one month per year, right?) that only the tail of the babyboom (at present 37-62 years old) will have to work till they're 67. In any case, it will not have any effect on the current economic crisis. So why present it as a remedy for this crisis?

Because in the long run it saves the government money, so with some creative bookkeeping they can pretend they don't have to cut costs now. And:

Originally Posted by ProPain

I think this is absolutely necessary to keep the pensions payable in the future. I think the unions are making a big mistake fighting this measure and I think the government made a mistake keeping this point under discussion instead of just pushing it through now.

I completely agree. I think I've expected to work until 70 for half my life now. It's a change that everyone has seen coming for years, and I don't see many downsides to it. Sure, you'll have to work longer, but you'll have to pay less tax before your pension. It's tough for those who do physical labor, but I guess for those people there could be an exemption. But as long as all construction workers do (black market) overtime in their spare time I'm not sure I should be sorry for them.

But as Matrix points out, this is something that mainly concerns younger people, people like us (not counting Beam ). We're (most likely) no member of any labor union because that's irrelevant to us. I've seen labor unions only do stupid things like getting more wages for civil workers. The union can claim to work in our interest and (mainly) in the interest of their members, but their members are OLD FARTS. Old farts don't have to work longer, and young people like us are more concerned by HOW THE HELL ARE WE GOING TO PAY FOR ALL THOSE OLD FARTS than "hey, they took two years of my holiday".

The thing is, it's a communication failure. If they'd say that they've come up with a plan that mainly affects the younger workers but that also helps those people to combat the effects of the demographic shift there would've been less of an uproar (although I've only heard uproar from the unions, apparently NOBODY ELSE FUCKING CARES). Clear numbers, clear message.

Originally Posted by Matrix

Subsidy on the isolation of houses: fine. Increasing "huurwaardeforait": sure. But what are they doing about the housing market? The housing construction is practically quenched, while we already had a shortage of houses and the population still increases steadily till 2040 to approx. 17½ million. Is this their solution to compensate the drop of house prices?

Uh, I don't know how it's in the north, but here only houses over 500k are affected. Average house price is a statistic that's very unclear. Don't listen to real estate agents. Anyway, why should the government compensate for the slight reduction (not drop) of house prices? I'm not convinced this is a problem that even really exists.

Housing construction is a problem. Construction companies are hurt by the financial crisis, sales are hurt by the economic forecast. Buying a new house is a process that takes years, people aren't interested in that right now. On the plus side: this is good for house prices. Another noteworthy thing: new houses are a scarcity item. Construction companies make higher profits when the economy is good, it's not strange they suffer more when the economy is cooling.

The government could've done something about it, like building more rental houses. But those projects won't start very quickly anyway, so it's not a direct stimulus to the economy right away. It couldn't have hurt though, so I'm unsure why they don't do it.

Originally Posted by Matrix

I think Marianne and I are quite lucky that we bought a house half a year before the crisis hit the Netherlands. The prices didn't drop in the city of Groningen, as an exception, and now it would've been much harder to get a mortgage.

You bought a house? How could I've missed that?

Originally Posted by ProPain

Subsidising scrapping your old car and buying a new one. This totally puzzles me. They selling this as an environmental measure: new cars, cleaner air. I think it's utter crap. We might as well send the money reserved for this measure directly to Germany/France/Japan as their car manufacturers will benefit most of this.

As long as you buy a japanese car you sponsor the harbor of Rotterdam. If you buy a german car, well, we're practically german anyway.

[romeothemonk]

Interesting to hear you guys debate this. I kind of like the extra views.

You guys have a car import tax, so the pay for clunkers is probably offset by the money for getting new cars taxed. New cars (at least in the US) cost a boatload in yearly taxes/registration. I have a 12 year old van and a 9 year old car and pay less than $100 in taxes annually on them. If I have a 2 year old car and a new Van, I pay more than $2000 in annual taxes.

In the U.S. there is not a darn thing stimulating about the stimulus package. It is basically a $800 billion dollar present to Unions, unemployed slackers and strong backers of the democrats. If I can have two jobs now, and go out and get more at any time, (not necessarily in my field), these guys can all get a job. We have to import illegal aliens to work in several of our jobs (IN Yankton SD) that pay more than $10 an hour because "Americans" won't work them. They get their unemployment, welfare, etc and then go and buy flat screen TV's.

Anyway, I can rant more later. Maybe someone can verify the tax structure on cars to see if my point makes sense.

[Darkness]

Originally Posted by romeothemonk

They get their unemployment, welfare, etc and then go and buy flat screen TV's.

It is somewhat similar here. Unemployed people don't have that much less to spend per month than people working low-paying jobs. So what stimulus is there for these people to do anything they can to find work.

IMHO people who are unemployed shouldn't be too picky about finding a new job. Any law against this or perhaps a penalty taken from their unemployment/welfare money for refusing a low-end job would have my support...

[Robi D]

The one thing that has struck me about all the 'crisis packages' is the sheer illogic of them.

We are told that the crisis happened because of basically spending more money then we had to spend, yet now they are tring to say the solution is to spend more money, which by the way we still don't have

[socralynnek]

Originally Posted by Robi D

The one thing that has struck me about all the 'crisis packages' is the sheer illogic of them.

We are told that the crisis happened because of basically spending more money then we had to spend, yet now they are tring to say the solution is to spend more money, which by the way we still don't have

The problem is: The money now spend by the governemnt might (if done right) be less than the losses in taxes and costs of social welfare if more people get unemployed than already will be.

So therefore spending money now might be even better than not spending it.

Therefore tax cuts are a bad stimulus package because it doesn't create much jobs by itself. Building infrastructure or such does better. Especially if these investments are something that had to be done anyway but might be done later.

Governemnt spending has to be counter-cyclewise. But most politicians tend to spend more when they have more and tend to cut investments when tax revenue is low. The other way round would be better.

The problem with most of the currently debated stimulus packages is: A. That they are quite late
and B they are half-hearted, which means they do a little bit of this and a little bit of that(for example including tax cuts to please that one group/party, doing a little here, doing a little there)
Often just fixing the symptoms instead of the cause (like with giving money to buy new cars while destroying the old ones)

So, I don't mean that stimulus packages are wrong in general, but they really need to stimulate creation of jobs to be effective.

[Shabbaman]

Originally Posted by romeothemonk

You guys have a car import tax, so the pay for clunkers is probably offset by the money for getting new cars taxed. New cars (at least in the US) cost a boatload in yearly taxes/registration. I have a 12 year old van and a 9 year old car and pay less than $100 in taxes annually on them. If I have a 2 year old car and a new Van, I pay more than $2000 in annual taxes.

Taxes are based on the kind of fuel and weight of the vehicle. I have a diesel VW Golf and pay something like 800 euro's a year in tax. The same car with a standard gas (petroleum) engine would cost a quarter of that. This is offset by the cheaper diesel (there's a lot of tax on fuel itself as well), but to break even I'd have to drive 30k a year. The last years (basically since moving from the middle of nowhere (where matrix lives) to the center of the universe I'm not using the car that much, so the difference in tax is why I am considering to get a non-diesel car.

New cars mean a lot of revenue for the government, indeed offsetting the scrapping bonus. But (most likely) the bonus will be payed for second hand cars as well. Still, they'd net 19% VAT on this anyway. But newer cars pollute less, so that makes it easier for our country to meet EU standards in the near future. Thus they save money they'd have spent on different kind of measures.

[socralynnek]

Here in Germany I pay a little over 100 Euro taxes for my car (it is based on engine size, just looked up the word: displacement-based motor-vehicle tax), but they'll change it this year to be CO2-Emissions based, but the height won't change that much. I got a Honda Jazz, so it's a rather small car. Diesel cost here also more taxes than Otto-Engine-cars, I guess, here it is 20K km per year to break even with lower gas prizes.

BTW, gas prices are much higher here than in the US (currently 1.20 Euro/Litre for standard, i.e. 6.16 Dollars per american gallon if I got the units right) and that is also partly due to taxes and therefore our lower vehicle tax might be offset if you drive a lot.