30 Oct 2012

New Dutch govt unveils austerity plan

8:56 am on 30 October 2012

The new coalition government in the Netherlands has unveiled an austerity programme aimed at saving 16 billion euros by 2017 in a bid to cut the country's deficit.

"(This) means 1000 euros per Dutch resident," said Liberal VVD party head Mark Rutte at a news conference on Monday.

"It's necessary because our country is still living beyond its means," said Mr Rutte, who is expected to stay on as prime minister in the coalition with the Labour PvdA party.

The two parties said on Sunday they had agreed to form a Liberal-Labour coalition.

The austerity drive will include reforms in health insurance, real estate, unemployment benefits and a reduction in development aid.

AAP reports the Netherlands' deficit tipped to 4.7% of gross domestic product last year.

Talks on budget cuts led to the collapse of Rutte's government in April, when his far-right parliamentary ally walked out of talks.

The Liberals obtained 41 seats in elections last month and Labour took 38 of a possible 150 seats.