Almost 8 out of 10 Italians do not want to hear about taxes on cash e bank deposits. In a country where household financial wealth has not yet returned to pre-crisis levels, where much of the money in circulation derives from a legacy from the past and not from recent gains, where investing in government bonds and infrastructure is considered risky and unprofitable, cash remains the only certainty for citizens.
Just on the day the Government decided to postpone the entry into force of the new ones cap rules on cash payments (the decrease from 3 thousand to 2 thousand euros will come into force in the two-year period 2020-2021) the 2nd report produced by da Censis for Aipb (Italian Private Banking Association) once again confirms how much Italians care about their savings and dear old banknotes.
The report entitled “Italians and wealth. Relying on the future, restarting from infrastructure” was presented today in Rome by Giorgio De Rita, Secretary General of Censis, and discussed, among others, by Paolo Langé, President of Aipb, Gian Paolo Manzella, Undersecretary at the Ministry of Economic Development, Innocenzo Cipolletta, President of Assonime and Aifi, Magda Bianco, member of the Committee for financial education and representative of the Bank of Italy, Gianfranco Di Vaio, Head of Research of Cassa Depositi e Prestiti, with Mario Sechi, Director of Agi.
At the center of the study is not only the relationship between Italians and their wealth, but also indications on the attitude of private customers, increasingly distant from government bonds, but inclined to invest in strategic works for the country's future.
THE WEALTH OF ITALIANS: HOW IT IS, WHERE IT IS, HOW MUCH IT IS
According to data presented by Censis, in 2018 the total financial wealth of Italian households amounted to 4.218 billion euros, a substantially stable level (-0,4%) compared to that recorded in 2008, i.e. before the outbreak of the financial crisis. A figure that could be read positively or negatively: while on the one hand we are still stuck at pre-crisis levels, on the other we have recovered the ground lost during the recession. In this picture, there are 500.000 Italian families who hold financial assets of more than half a million euros (around 2,5% of households) and the savings portfolio for investments entrusted to private banking amounts to around 850 billion euro.
Interesting information also concerns the composition of the portfolio of citizens' financial assets. 33% of the total portfolio of Italians, equal to 1.390 billion euros, is represented by cash and bank deposits. A number that represents a growth of 13,7% compared to ten years ago. Exponential increase (+44,6% on 2008) for insurance reserves, equal to 23,7%. On the other hand, shares (-12,4%) and bonds are in free fall, which today account for 6,9% of the portfolio, 10% 21 years ago.
NO ONE TOUCHES THE CASH
“According to 76,8% of Italians, cash, money held in bank accounts and financial investments should not be taxed to a greater extent than the resources that are instead invested in the real economy. The ideas of Italians on savings envisage an intransigent defense of the saver's freedom of choice and still a predilection for cash: a much-loved tool against insecurity”, explains the Censis-Aipb report. Simply put, the right way to stimulate investments is not to introduce an additional tax on liquidity, but to make investments more attractive in a country which, on the contrary, seems to have become unreliable and attractive by now.
ITALIANS-GOVERNMENT BONDS: A FINISHED LOVE
An example of what has just been said are government bonds. Indeed, the survey shows that 61,2% of Italians would not use their savings to buy BOTs, BTPs or other public debt securities. It is the end of the Bot people, when private savings fueled explosive public spending, which in turn fueled private incomes and a very generous public welfare system.
But why don't people like government bonds anymore? “Today 66% of European bonds have rates below zero”, explains the president of Aipb, Paolo Langé, a feature that undoubtedly does not push savers to bet on bots. But distrust of the state and fears for the future also contribute to the flight from public bonds. “In the perception of the richest people there is a country risk for Italy. For 53,4% of them, thinking about the country's future arouses concern, for 23,4% curiosity and only 8,3% arouses a sense of challenge. These are states of mind that do not provide incentives to invest, especially in the long term”, reads the study.
INFRASTRUCTURE: INDIVIDUALS READY TO INVEST
The Censis Aipb survey focuses on investments in infrastructure. Italy needs it like air, but the perception is that these are risky and unprofitable investments.
According to 50,7% of the interviewees "we need to invest in securing the territory against landslides, floods and earthquakes, for 39,3% in alternative energies, for 33,2% in the renovation of monuments, churches, works of art art, archaeological sites, 22,5% in local railways and trains, 22% in road and rail connections between the Tyrrhenian Sea and the Adriatic, 20,8% in fast internet connection everywhere and 20 % in public transport in big cities”. The needs are therefore clear, but so are the problems. If in Italy infrastructures are announced and then not completed, for 57,9% of Italians this depends on corruption, for 54,1% from excessive rules and slow bureaucracy, for 33,7% from insufficient controls on the companies that carry out the works, for 31,7% from politics that change their minds about the works to be carried out.
All reasons that dissuade citizens from investing their money in infrastructure financing instruments, including private banking customers – i.e. the wealthiest – who decide to opt for other investments considered safer from the point of view of returns. Despite all this, 35,3% of these "rich" said they were willing to invest in infrastructure.
"The 2nd Aipb-Censis Report shows an important percentage of private customers interested in investing in infrastructure and public works in Italy", said Paolo Langé, President of Aipb. “To increase this share, a series of actions must be taken as soon as possible to facilitate access for investors: recognition of the qualitative level of advanced advisory services, expansion of the range of usable financial instruments and the creation, for these instruments, of a secondary market. Without neglecting the issue of taxation: targeted interventions would have a significant impact on long-term investment choices in infrastructure”, concluded Langé.
To channel the money of the richest towards strategic infrastructures guarantees, tax incentives and adequate instruments are therefore needed. In the latter field, the Eltifs stand out, European Long Term Investment Funds. These are closed-end funds that aim to bring retail savers closer to illiquid investments and are therefore suitable for supporting investments in the real economy and infrastructure. Introduced by a community regulation of 2015 (Regulation EU 2015/760), in Italy they were governed by the Growth decree which provided for, under certain conditions, the exemption from income tax and inheritance tax. Not enough according to insiders who complain about the elimination during the conversion process of the decree of the rule on the IRPEF deduction of 30% of the amount invested in ELTIFs for individuals, as well as the IRES deduction of 30% for legal entities .
There is therefore still a long way to go in trying to push Italians' money towards infrastructure. The theoretical willingness to invest is not enough.
