THE HAGUE, 20/09/00 - The Dutch economy is sailing ahead, buoyed by very favorable winds. The budget that Finance Minister Gerrit Zalm presented to parliament on Princes Day yesterday leaves no doubts about that whatsoever. For the first time in 51 years, a budget has been presented which will be in surplus.

Nearly 15 million guilders of extra spending is now planned, while the 1998 cabinet accord projected only half of that amount. Health care (3.3 billion guilders), education (2.8 billion), infrastructure (2.4 billion), the labour market (2.1 billion), and security (1.2 billion) will be the main beneficiaries.

Further good news for citizens is that as a result of the new tax legislation, the burden of taxes will be reduced by 6.6 billion guilders. This means purchasing power will rise by at least 3 percent next year for nearly everyone. Alongside this, the cabinet will still be able pay off around 21.4 billion guilders of the national debt.

The government has been basing its budgets for years on a cautious growth scenario for the economy, while in practice Dutch GDP growth is expanding by over 3 percent for the sixth successive year. This year, GDP growth is put at 4.5 percent and next year, at 4 percent.

But there are also some worries, for example about the rise in wage costs. Economic Affairs and Social Affairs Ministers Annemarie Jorritsma and Willem Vermeend point out that wage costs threaten to increase too rapidly due to the tight labour market. This could damage the economy.

Another concern is the aging population. From 2010, the post-war baby boom generation will reach retirement age and will make heavy demands on pension provisions and healthcare. To absorb these costs, a civil servants' working party recently proposed that the national debt should be completely paid off within 25 pears. This would save billions annually in interest payments. Minister Zalm is in favor of the idea, but considers the subsequent administration will have to make this choice.