On November 24, the Budget Planning Document (DPB) which illustrates the main lines of intervention of the public finance maneuver that will be included in the budget law for 2023 and which is the key document that is sent for evaluation to the European Commission.
In view of today's start of the parliamentary process of the Budget Maneuver, theObservatory on Public Accounts (Cpi) directed by Professor Giampaolo Galli, he analyzed the provision, praising its prudence, clarifying some points, but also highlighting some more controversial points.
The opinion of the CPI Observatory on the Programmatic Financial Statement Document
THEObservatory "appreciates prudence" with which the document evaluates the economic scenario, forecasting growth of 0,6% in 2023, and sets the budget target at 4,5%, 1,1% less than the preliminary balance for 2022. "This target – experts point out – it involves a highly restrictive orientation of public finance, as the primary deficit, i.e. net of interest, is reduced by more than one point of GDP compared to 2022. Even more restrictive (-1,3 per cent) is the structural primary budget, i.e. net of effects due to a sharp slowdown in the economy”.
Within the Dpb it is indicated that almost everything the extra deficit compared to the trend trend – in figures 22 billion euro – it will be used to deal with energy price increases. However, the Observatory points out, "out of a gross maneuver of 35 billion, no less than 13 billion" are "dispersed in many rivulets corresponding to as many election promises. Those resources could prove to be invaluable for alternative uses”, considering that the aid only covers the first quarter of 2023 and that some sectors (in particular health, education and, in general, public employment) could find themselves suffering greatly given that the planned allocations are well below the expected inflation.
What's in the Financial Statement Planning Document
The Observatory points out how, in the chapter covers13,3 billion of resources are classified as "other income" (for 6,3 billion) and "other expenses" (for 7 billion), which means that the coverage for the entire part of the maneuver that is not financed in deficits are not clarified. “It is easy to imagine that this will be the first thing the European Commission will ask for” underline the experts, who clearly speak of a “political marketing technique”
Moving on to interventions, by far the most important item concerns the measures against dear energy: 19,4 billion. Followed by the cut tax wedge which will have a significant effect only in 2023 (4,8 billion), while in 2025 the effect of the measure will drop to around 660 million. The measures in favor of families instead they are worth 937 million.
Interestingly, despite the announcements, a “what has been defined tax break a negative effect (for a good 1,117 billion) is attributed to the deficit in 2023. And that in the three-year period 2023-2025, the net effect of the measure is zero: the higher revenues of 2024 and 2025 (due to the fact that five-year installments are allowed) compensate for the lower revenues of 2023”, the economists of the Observatory point out.
Moving on to flat tax, flagship provision of the League, "seems to have a very limited importance when fully operational". In 2025, the cost to the state drops to 339 million euros. Finally, regarding the pensions "we see a minus sign, which means that the de-indexation of medium and high pensions is worth more than the set of measures that have been announced as important results of this maneuver: the increase (for the two-year period 2023-2024 only) of minimum pensions, the so-called quota 103 and the extension with modifications of the "Women's option", underlines the Observatory.
How does the public budget change?
In 2023 the total of public spending (trend) is equal to 1,053 billion euro. With the manoeuvre, expenditure increases by 17,97 billion almost entirely destined to aid against energy price increases, to which must be added 2,2 billion for intermediate consumption (mostly healthcare purchases) and 2,1 billion for higher transfers on capital account.
On revenue on the other hand, a reduction of 2,1 billion is expected, mostly explained by the reduction in social security contributions. There tax burden falls by 2,3 billion; in relation to GDP from 43,4% to 43,2%. “These are minimal changes, which however are justified in the light of the consideration that it would not be prudent to go beyond the 4,5 percent deficit. Although much has been said in recent years against this fact, the reality is that resources are scarce”, concludes the Observatory.
