Published On: Mon, Dec 23rd, 2013

Government warns of potential crisis levy

Ettienne-van-der-HorstWILLEMSTAD - If no measures are taken now to structurally reduce the personnel expenses of the government then the government will be forced to take other measures such as adjusting the salary system for civil servants and a temporary levy on their salaries. This is according to Minister Etienne van der Horst (Policy, Planning and Services) in an internal memo which was sent to all government employees.

The crisis levy of ten per cent was one of the measures that the government had to take during the eighties to increase its income dramatically in that period and reduce its expenditure.

In the memo, the Minister calls the temporary charge as an option if no agreement is reached between the unions and the government on structural cuts in personnel expenses. It is calculated that by the years 2016/2017, the government should have achieved a structural saving of 50 million guilders.

Van der Horst emphasized again that doing nothing is not an option at this time. The government is already negotiating with four government unions, namely Abvo, NAPB, STrAF and SAP.

The unions have indicated to have major problems with the proposals presented by the Minister. Van der Horst expressed the hope that the parties will come to an agreement soon. If the parties fail to reach an agreement then the possibility exists for an arbitration agreement.

The Minister stressed that the government's actions may ultimately be imposed unilaterally but that it is the preference of the Council of Ministers to reach an agreement together. The intention was to implement the measures on January 1, 2014, but that is not feasible, according to the Minister.

The Minister does not rule out that additional measures will come if it takes too long for the parties to find each other, or if they cannot agree on the set of measures. The measures now on the table are based on for example raising the retirement age for civil servants from 60 to 65 years.

Furthermore, the government wants to fix the pension based on a calculation over the average salary and not the last salary before retiring.

Also the government does not want to index the compensation for the increased cost of living, which is also part of the pension. In addition, the government wants to abolish the early retirement agreement, which allows for people who are nearing their retirement to retire earlier.

Furthermore, the indexation of salaries in the public sector will be frozen for a period of two years. The holiday allowance will be halved.

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