A measure aimed at helping the purchasing power of families, especially the larger ones, and offering tax breaks to companies that hire. Prime Minister Giorgia Meloni, during the Council of Ministers and the majority summit, outlined her key points in view of the drafting of the next budget law. The intention to extend the reduction of the tax and social security wedge – in force from 1 May 2023 for incomes up to 35 thousand euros – and the tax relief for larger families is therefore confirmed.
The center-right coalition, in a joint statement after the summit at Palazzo Chigi, specifies that the budget law “like the previous ones, will be serious and balanced”. The maneuver, it is explained, “will confirm some priorities such as tax cuts, support for young people, families and birth rates, and interventions for companies that hire”. The opposition, meanwhile, says it is concerned about the possible cuts to health care and social security and the fiscal effects of some measures.
Meloni: “Budget law inspired by common sense and seriousness”
During the first Council of Ministers after the summer break, the Minister of Economy Giancarlo Giorgetti illustrated the process of the new structural budget plan, which must be sent to Brussels by September 20 after passing through Parliament. The document aims to define the trajectory for net spending, consistent with the new Stability Pact and the time frame established by the EU for the recovery from the excessive deficit to be achieved through a recovery plan that has a duration of 4 years, extendable up to 7 years. It is estimated that Italy can proceed with cuts equal to approximately 0.5%-0.6% of annual GDP to recover from the infringement procedure. The text will also contain the indication of the deficit for the indicated programming time frame.
“It will be a budget law inspired, like the previous ones, by common sense and seriousness. The season of money thrown out the window and bonuses is over and will not return as long as we are in government”, Meloni argues during the Council of Ministers. “All available resources must, in my opinion – adds the prime minister – continue to be concentrated in supporting companies that hire and create jobs and to strengthen the purchasing power of families, with the usual special attention to those with children”.
The controversy over the single allowance
The controversy over the hypothesis of revising the operating mechanism of the single allowance does not subside. Meloni warns: «The maneuver has yet to be written, I advise great caution – I say it to you first, I will also say it to the majority parliamentary groups – in commenting on measures and interventions that the press has spoken about so far but that have never even been proposed». And again: «If there is» someone who would like to blow up the single allowance, it is certainly not this Government but some zealous European official who has opened an infringement procedure and asked Italy to cancel the requirement of residency in Italy for non-worker recipients of the allowance. Crazy changes, unfair for Italian families and unsustainable for the balance of the State’s accounts».
The prime minister and the head of the Ministry of Economy and Finance would have recommended to the ministers a careful management of the resources available. Because the issue of funds remains fundamental in view of the next maneuver. The path is narrow, given the need to lighten the burden of public debt – which is about to reach the symbolic figure of 3 thousand billion.
The maneuver, a document slightly higher than 25 billion euros, should include the confirmation of the cut in the tax and social security wedge for incomes up to 35 thousand euros to combat inflation. Among the hypotheses under study there would also be that of trying to extend it to incomes up to 50-60 thousand euros. But the issue remains that of limited resources. The Parliamentary Budget Office has estimated that just to confirm the interventions financed last year, around 18 billion are needed, of which just under 11 for the cut in the wedge. For other interventions, therefore, the room for maneuver appears limited. Help could come from the higher tax revenues recorded in the period January-June 2024, the latest bulletin from the Ministry of Economy and Finance certifies an increase of 10.1 billion compared to the same period of the previous year (+4.1%). For a few days, the hypothesis of a cut in tax expenditure has been gaining traction, a set of hundreds of exemptions, deductions, tax credits, reduced rates. In 2016, a study on behalf of the Senate surveyed – adding together state taxes and local taxes – over 600 different measures, with a financial impact of almost -80 billion euros, but complete information was not available on 67% of state expenditure. Other resources could come from the effects of the revision of the two-year preventive agreement. Even if the previous one in 2003 – albeit in a different context – did not have the hoped-for success, collecting just 57 million euros compared to the estimated 3.5 billion.
The oppositions
The opposition is preparing to do battle in the Chamber. “We are concerned that the government has not yet given answers on what it intends to do with this maneuver. And we are even more concerned by the rumors that they would once again cash in on pensions,” insists PD secretary Elly Schlein. “We cannot accept – she continues – seeing pension indexation cut once again.”
While from the M5s the group leader in the Chamber Francesco Silvestri argues: «The blanket is not short, it is the fabric of the politicians of the Meloni government. They are cutting all strategic investments for the country, but they do not touch the extra profits of the banks, they do not implement the digital tax and they let the salaries of the citizens decrease more and more. They say that the blanket is short, and yet they continue to spend money on weapons».