Copenhagen - Denmark's government on Tuesday presented a controversial growth package that would reduce corporate taxes and increase public spending to spur growth and create 150 000 jobs.
The centre-left coalition plan calls for a progressive reduction in corporate taxes from the current 25% to 22%, as well as an increase in public investment of six billion kroner (€804m or $1.05bn) to stimulate the economy.
"We are creating jobs now, but we are also getting Denmark ready to grab the economic recovery when the internal slump turns," Social Democratic Prime Minister Helle Thorning-Schmidt told a news conference, adding that while there were no quick fixes, the growth plan was a "step in the right direction."
At the same time, Economy Minister Margrethe Vestager said no new taxes would be imposed on businesses.
"We are sending a clear signal to companies that we do not plan any new taxes and duties for businesses … This is not just a growth package, it is a complete growth plan towards 2020," she said.
The corporate tax reduction would however not include a decrease in the tax on labour costs in the financial sector, nor would it apply to North Sea oil extraction.
The proposal also calls for lower energy duties for companies, an increase in planned public sector investment and a reintroduction of tax rebates for Danes who make home improvements.
While Danish industry was positive, the unions were not, with eight unions having written an open letter to the prime minister complaining that reduced corporate tax would be at the expense of public investment.
The move came one week after a proposal to overhaul the student grant system, and a social security reform that would force all unemployed under-30's to pursue an education rather than live off social security.
All three government proposals must now be negotiated with other parliamentary parties in order to win a majority.
Although the left-wing Red Greens are expected to vote against the government's proposals, centre-right parties are expected to approve them.
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