THE HAGUE, 29/08/00 - Prime Minister Wim Kok is not enthusiastic about a discussion on a higher estimate of the economic growth rate. Both Labour (PvdA) and the center-left (D66) want the next Cabinet to abandon the present cautious scenario of 2 percent economic growth per year.

The PvdA and D66 point out that economic growth over the past ten years was above 3 percent on average. A higher estimate would mean that the next Cabinet would have more money available for items such as education and healthcare.

Kok claimed that in the budget for 2001, the Cabinet has already included many items to make it more attractive to work in the education, healthcare and security sectors. The Cabinet's discussions on the budget were completed last Friday, and the contents will be announced on Princes Day.

It is already clear that for the current budget year, new surpluses on interest payments, natural gas income and social security will make another 1.2 billion guilders available for education (300 million), healthcare (350 million), defence (200 million) and the rebuilding of Enschede (270 million). This brings the total of extra expenditure for 2000 to almost 12 billion.

In 2001, the Cabinet will use some 20 billion in extra income from taxes and social security contributions for paying off the national debt. According to the coalition manifesto, half of this should be spent on reducing taxes. But as the tax reforms to be implemented in 2001 already bring down taxes by some 6.5 billion, the Cabinet fears that a further reduction would lead to an overheated economy.