Dutch cut welfare in austere budget

With the Dutch population ageing and the economy all but stalled, the conservative government presented an austere budget yesterday that cuts welfare benefits and increases the premiums most workers will have to pay.

Jan-Peter Balkenende, the Prime Minister, said: "The welfare state of the 1960s and 1970s needs to be altered. People who are completely unfit to work will always receive help but the system of cradle-to-grave assistance will have to be changed."

Gerrit Zalm, the Finance Minister, presented the €187bn (£131bn) budget to parliament at the start of a debate expected to last several days. Among once-unthinkable changes, disability payments will be replaced by "Ability Compensation," under which people with physical or mental problems will receive money according to their level of disability, but will be expected to take on as much work as they can handle to make up the balance.

Fewer people will qualify for unemployment benefits and those who do must enroll in a job-finding programme to receive aid; healthcare benefits will be reduced; and welfare increases will be frozen.