UPDATE 1-Nearing election, Dutch government plans to raise spending

09/20/2016 10:48

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AMSTERDAM, Sept 20 (Reuters) - The Dutch government said on Tuesday it would spend more generously next year, reversing years of austerity policies as it heads into campaigning for elections in March.

Finance Minister Jeroen Dijsselbloem said the government would increase spending by 2.3 billion euros, with more for security, healthcare, childcare and education.

The budget also included an upgrade to next year's growth forecast by the Netherlands' Bureau for Economic Policy Analysis, from 1.6 percent to 1.7 percent.

"The tide has turned," Dijsselbloem said in a speech to parliament. Now "we can look further ahead and invest in opportunities and people."

It is not clear whether voters will listen: national broadcaster NOS published a poll on Tuesday which said most Dutch people think their personal finances are worsening and they are not benefiting from the recovery.

Prime Minister Mark Rutte's conservative VVD Party trails the far-right party of populist Geert Wilders in opinion polls. Wilders is campaigning on a platform that would have the Netherlands close its borders to Muslim immigrants and refugees, and quit the euro and European Union.

Dijsselbloem's Labour party has lost more than half its popularity since the previous elections in 2012.

The minister responded to criticism in recent weeks that the government's austerity policies had damaged the economy unnecessarily. "Spending cuts may cost jobs and growth, but the specific Dutch circumstances couldn't be ignored," he said, arguing that the Netherlands had been harder hit by the financial crisis than others and urgently needed to cut spending.

The national debt is expected to fall to 62 percent of GDP next year amid falling unemployment. (Reporting by Anthony Deutsch; Editing by Mark Trevelyan)

09/20/2016 10:48