Everyone calls for development, but nobody quite knows how to actually do it. Most limit themselves to hoping for increases in public spending and/or tax cuts, which however, given the level of our public debt, are impossible. The only way is that of a drastic cut in some items of current spending, where patronage waste and thefts of the political class lurk and high bureaucrats, and initiate a gradual but substantial reduction in taxes on workers and companies, which have reached such a level as to discourage any entrepreneurial initiative.
But there is a stubbornness about this resistance of the parties, who do not want to reduce their power to intermediate public money which, according to them, is a source of electoral support. Only the third pole had presented amendments several times, the last one last week, signed by 25 senators to the decree on tax simplification, to make a real cut in expenses and place the savings in a special fund to be used for tax reduction.
The amendment was failed because Pd and Pdl, in the wake of a note from the State General Accounting Office, argued that, on the basis of art. 81 of the Constitution, the maneuver was without cover. But what kind of coverage is needed if the only plan was to set up a special fund with the savings made to be allocated, at a later stage, to the reduction of taxes? In short, yet another fraudulent parliamentary maneuver to avoid affecting the sanctuaries of public waste, which is at the origin of the progressive strangulation of our economy.
Senator Mario Baldassarri, president of the Senate Finance Commission, has long been a supporter of the need to attack spending by avoiding an excessive increase in taxes, which moreover have such a marked recessive effect as to solemnly nullify the goal of balancing the budget deficit promised for 2013. Let's look at the numbers first.
“We have been announcing spending cuts for many years which in reality have never really been made – says Baldassarri, showing the tables of the complicated public accounting – because they were cuts compared to a phantom trend increase (we don't know how estimated). The result is that, compared to 2010 data, the latest available, current spending, too after the two maneuvers by Tremonti and that by Monti, it will rise in 2013 from 739 billion to 770 billion, with an increase of 33 billion, while that for investments will drop from 54 to 39 billion, with a cut of 14 billion, i.e. by almost 30%. And then we complain about the lack of infrastructure! In the meantime, ie between 2010 and 2013, taxes will rise by as much as 108 billion, going from 722 to 830 billion. Of these, a good 71 billion will be used to eliminate the public deficit, while the others will continue to finance an expenditure which, although slowed down, is always on the rise”.
But Minister Giarda himself, who has been entrusted with the task of carrying out the spending review, argues that there is no longer much room for reducing spending and that long-term work needs to be done to improve public services, going to see the office for the office what can be done to increase efficiency and perhaps reduce costs a bit. "La spending review is fine, but we have been talking about it for thirty years without great results, while we have to face an urgent problem which is that of reopening spaces for growth. Furthermore, if we present ourselves with the public finance framework illustrated above, we will not be able to be credible even on the markets and obtain a definitive lowering of the spreads. In fact, beyond the proclamations, any analyst understands that a sharp increase in taxes together with a reduction in investments will perhaps succeed in eliminating the deficit in 2013, but by depressing growth it does not give peace of mind on our ability to repay the debt when it matures.
If we examine public spending as a whole according to an economic classification (i.e. salaries, pensions, interest, purchases, investments and contributions) instead of according to the traditional functional system based on large aggregates such as health, education, defence, etc., we see that two items in particular are completely out of control: purchases and contributions. Purchases, in particular, in recent years have gone from 85 to 140 billion, of which about half concern healthcare, while contributions travel around 40-42 billion a year and no one has ever managed to dent them”.
The proposal of the senators of the third pole concerned precisely these two voices, on which, however, the maximum resistance of the parties is centered, which want to defend the power of their apparatuses, especially local ones, and of their customers who live on these public expenses and which amount to hundreds of thousands of people.
“When there is a moment of crisis in a family, savings are made on the amount of expenses for the previous year and not on what would have been nice to do this year! If we take a detailed look at the expenses for purchases, grown as mentioned between 2004 and 2009 by 50%, we could well set a reduction target for 2012 and 2013, compared to 2009 levels of 10%, which is normal in any company that has to reduce costs to face the competition. In this way there would be savings of between 15 and 20 billion a year. If we then examine the item concerning current account grants and non-refundable grants, we discover that of the total 40 billion, 14 concern FS, Anas and local public transport, 17 are contributions paid directly by the Regions and 11 those of the State. Our proposal is to turn these contributions into tax credits that would only be used by businesses that are truly viable and not from those who, having pocketed a part of the contribution, then vanish into thin air. According to a recent study, only 3% of the companies that received these funds after 5 years are still active. In this way, without touching the money that goes to public bodies, savings of 20-25 billion could be achieved. After verifying the effective consistency of these savings by placing them in a fund, with 40 billion, taxes on workers and businesses could be reduced by at least 30 billion, leaving a further margin to strengthen the objective of zeroing the public deficit in 2013”.
It seems like a relatively simple exercise. But if it has never been done so far, there must be some reason. Powerful interests move around this type of public expenditure that no one has ever had the courage to face. “Perhaps there is a problem of cultural deficiency not only of politics, but also of a large part of the ruling class. But there are significant clues. For example, in 2010 Tremonti had indicated a ceiling on purchases by state administrations for the years 2012 and 2013 with a reduction of 3% and 5% respectively compared to 2009. A provision not extended to all peripheral administrations but which nonetheless marked a step in the right direction. But then in the maneuver of August 2011, that provision was repealed in the general silence of the opposition parties and public opinion. And what about the emptying of the role of Consip which was supposed to act as the central office for all purchases of the Pa, and whose services were made only optional?
But the cost-cutting doesn't stop there. There are the costs of politics in the strict sense to face and those relating to local public services. And then the reorganization of the bureaucracy according to the indications of Minister Giarda.
“Those we have indicated are urgent measures that can give breathing space to the government's economic policy to immediately counter the effects of the current recession. Then there is the need to reduce the number of parliamentarians (even if the savings are modest), or to merge the municipalities, eliminate the provinces, reduce the many useless central and local bodies. Very well, but these are measures to be taken immediately which, however, will have effects over a longer period of time. Just as very important is the reform of the Justice system and the simplification of regulations, especially with regard to international entrepreneurs. To strengthen the consolidation and increase our credibility vis-à-vis investors buying government bonds, we also need to start divesting part of the government assets quickly, perhaps by making one or more funds capable of enhancing the real estate assets and selling the shares to investors, thus reducing the public debt and the related interests. But the real costs of politics lurk in those two items, purchases and transfers, which have never been touched so far and which must instead be addressed immediately because there is the real treasure, on which we can base our chances of relaunching the growth of the 'economy".
