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September 6th, 2013

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Opposition leaders Venstre want to pay for tax cuts by slashing Denmark’s 16 billion kroner aid budget by 2.5 billion kroner.

Denmark currently gives 0.83 percent of its GDP in aid but today Venstre leader Lars Løkke Rasmussen proposed cutting it back to 0.7 percent.

“In the middle of a recession and declining competitiveness, we don’t think it is the time overly generous targets,” Rasmussen said at a press conference today, pointing out that no other country pays out as much aid as a proportion of their GDP as Denmark does.

Targeting aid on Africans and refugees
Venstre calculates that if the government maintains its target of raising development aid to one percent of GDP by 2020, it would wind up spending an extra seven billion kroner.

Rasmussen called for a more targeted approach to giving aid and that the 24 countries currently classified as priority recipients of aid should be reduced and the focus put mainly on African countries.

Venstre also wants to invest more in helping refugees and asylum seekers closer to the sites of conflict in the hope of reducing the rising cost of housing asylum seekers in Denmark – a billion-kroner bill paid using development aid.

“[If] we were better at helping refugees near the conflict [we would] be able to help more as well as helping those refugees who are too weak to take make the long journey to Denmark,” Vesntre write in its proposal.

Today’s proposal was made as part of the run up to negotiations over the 2014 budget. Venstre want to cut taxes by five billion kroner next year in a bid to create jobs.

READ MORE: 2014 budget to focus on public-sector investment

While some of those savings could be made from cutting aid, the party says one billion could be saved by sending more council services to tender. Further savings could be made by limiting public sector growth.

Government unimpressed
The government is less than impressed by Venstre’s proposals, however.

“Venstre has once again failed to illustrate exactly what freezing public sector growth means, namely cutting 33,000 jobs by 2020,” Jonas Dahl, a spokesperson for Socialistisk Folkeparti, said in a press release.

Socialdemokraterne also expressed scepticism, arguing that Venstre was electioneering, rather than making sensible proposals for next year’s budget.

“Wanting to cut taxes is fair enough, but then we need an honest answer of what it will cost,” Jesper Petersen, Socialdemokraterne finance spokesperson, told Jyllands-Posten. “The fact is it will mean fewer public sector employees and we won’t be able to afford certain things. For example, improving hospitals, education and the efforts to tackle gang crime, just as the government is proposing.”

“Populist and irresponsible”

Development minister Christian Friis Bach, Radikale, also condemned the proposal to cut foreign aid.

“It’s both populist and irresponsible to save on poor people who can’t vote in Denmark,” Bach told the Ritzau news bureau. “Venstre needs to answer whether it is Syrian refugees, Afghan school children or poor women in Mozambique who will pay for our tax cuts.”

He added that helping developing economies could ultimately stimulate growth in Denmark and the rest of the world.

“We are not going to leave the recession by shutting ourselves in and the world out,” Bach said. “We will leave the recession behind us by engaging with the world and contributing to solving the world’s big problems, from conflicts to climate change.”