[OPE-L] An illustration of the difference between production income and property income

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Dec 10 2007 - 13:46:25 EST

I chanced upon a Dutch CBS news release (17 july 2007) which nicely displays the accounting difference between production income and property income. 

The release mentions that the annual increase of net profits of financial institutions 2005/2006 was 17%, in total a net profit volume of nearly 25 billion euro, principally due to an increase in dividend receipts of 30%. The volume of dividend receipts was said to be 25.5 billion euro, and annual property income receipts increased by 30 billion to a total of 125 billion euro. Revenues increased a bit more than interest costs. 

The interesting thing to note is that at the same time, the value-added in the financial sector (i.e. the contribution to GDP) actually decreased, and the operating surplus also decreased, as shown by a graph: 

The first set of bars is the value-added, the second the operating surplus, the third the net profit. 

As a matter of fact, the estimated volume of post-tax profit of Dutch enterprises rose in 2006 compared with 2005, by 6.7%  to 87.9 billion euro (news release, 10 december 2007) . Domestic profits dropped by 2.7% but profits from "participations" (particularly foreign participations) increased by 45 billion euro. Dutch profitability is still at an historic high level, profitability exceeded 20% in 2000, 2005 en 2006 according to CBS figures. As far as making money is concerned, the Dutch can slog it out with the Chinese and the Jews for now, in a more egalitarian society.

Meanwhile of course the Mean Mr Mustards in the Dutch government still try to rob poor people of a bit of small change... 

The Socialist Party doesn't really have an analysis yet of the meaning of the Dutch empire. It is something which still has to be developed. 



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