New Danish municipal equalization reform allows money move from rich to poor

Source: Xinhua| 2020-05-05 22:17:53|Editor: huaxia

COPENHAGEN, May 5 (Xinhua) -- Danish Finance Minister Nicolai Wammen flanked by representatives from the Parliament presented a major new agreement on municipal equalization allowing a total of 19.3 billion Danish kroner (2.76 billion U.S. dollars) to be moved annually across municipalities, during a press conference here on Tuesday.

For instance, 1.4 billion Danish kroner (200 million U.S. dollars) will be transferred to 30 regional municipalities from richer municipalities, in particular, Gentofte and Rudersdal in the Greater Copenhagen area.

According to the agreement, 6.5 billion Danish kroner (945 million U.S. dollars) will be provided by the state to the equalization system in 2021 with 5.5 billion Danish kroner (800 million U.S. dollars) a year permanently thereafter.

"With the agreement, we are presenting today, we are laying the foundation for a better balance in Denmark. The widest shoulders must bear the heaviest burdens," said the minister.

In addition, the government is making available a special subsidy for vulnerable regional municipalities and island municipalities of 1.5 billion Danish kroner (218 million U.S. dollars)and a subsidy for vulnerable capital municipalities of 600 million Danish Kroner (87 million U.S. dollars).

The redistribution means more money will be available for municipalities with socially vulnerable citizens like the unemployed and elderly.

"Denmark is too small for big differences. Wherever you live in Denmark, you can expect that there is a proper welfare society for yourself and your family," said Wammen.

However, not all the socially vulnerable groups will benefit from the equalization.

In particular, the immigration equalization program, which financially benefited municipalities with a high concentration of immigrants will see money halved as demanded from opposition party Venstre when reaching the agreement with the government.

The reallocation of money also comes with an agreement that municipal income tax must not rise.

Meantime, the Social Democratic government and Venstre also made a supplementary agreement that prevents either party from making a fundamental change to the new equalization system in the future without the other party's consent. Enditem

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