Job and growth deal, part two, finalised
The second part of the government’s growth and jobs bill was agreed upon last night with opposition parties Venstre, Konservative and Liberal Alliance.
The 75 billion kroner deal is far more significant than the first deal, worth 15 billion kroner, and is designed to reduce burdens on businesses, increase investments and help create 150,000 new jobs by 2020.
Among the initiatives are the abolition of a CO2 levy on energy, easier access to financing, a corporate tax cut and an increase in public investment.
According to the finance minister, Bjarne Corydon (Socialdemokraterne), the deal will make a noticeable impact on Danish businesses.
“The deal will strengthen businesses to give them muscles to pull through when the crisis ends and it means that more Danes will be waking up with a job to go to,” Corydon stated in a press release. “That’s what our country needs.”
The economy minister, Margrethe Vestager (Radikale), added that the two-part growth and jobs bill brought Denmark closer to securing increased growth and employment.
“The two deals are worth a little over 90 billion kroner,” Vestager told public broadcaster DR. “We are reducing taxes and levies and increasing the options for public investment. We are also creating more further education for adults. The deal makes it more attractive to run a business and create jobs in Denmark.”
The reduction in the corporate tax from 25 percent to 22 percent will be phased in between 2014 and 2016 and will not apply to banks, nor oil companies operating in the Danish North Sea.
The lowered rate is intended to match corporate tax cuts in Sweden and the UK and will cost around 24 billion kroner in lost tax revenue by 2020.
Businesses will also benefit from a series of cuts to levies on energy and waste management that are hoped to improve their bottom line at a cost to the government of around 12.5 billion kroner by 2020.
An additional 15 billion kroner of public investments has been promised by 2020, while around 15 billion kroner have been set aside to fund renovation and support the building sector.
The deal will be paid for using cuts to both student grants (SU) and the least generous unemployment benefit (kontanthjælp), as well as reducing the rate of growth in the public sector.