crisis, says the Organisation for Economic Co-operation and
Development, OECD in a new report on Denmark’s economic situation. But
in its ‘Economic Survey’, the OECD still expresses concern over
Denmark’s competitiveness, which has been in poor shape since
2000.
Denmark’s low productivity growth makes it difficult to achieve
growth and create new jobs. The country’s productivity has not
increased while main trading partners Germany and Sweden have
experienced a marked increase in productivity.
As a result the OECD suggests several economic reforms for the
Danish economy, including an increase in property tax and reduced
income tax. The top tax rate, paid by high earners, should be
reduced.
The OECD also recommends a reform of the special disabled employment
programme (Fleksjob) to make it more targeted and less generous.
Fleksjob gives citizens with reduce working ability the chance to find
employment covered by wage subsidies.
The OECD’s economists praise Denmark for reforming its early
retirement scheme and retirement age, and the OECD also supports the
government’s kick-starting of the Danish economy and its plans to
introduce expenditure ceilings for municipalities which would tightly
control their budgets.
The Danish government is expected to introduce a tax reform in 2012,
yet despite the OECD’s recommendation it will not include any increase
in property tax, according to Minister for Economic and Interior
Affairs Margrethe Vestager (the Danish Social Liberal Party). This is
because property taxes were ring- fenced in the coalition agreement
covering this parliamentary term.
