On the spending review front, “lPolitics must make courageous choices, and it can do so by fielding two political exchanges”. The president of the Senate Finance Commission, Mario Baldassarri, is convinced of this, as he and other colleagues presented some amendments which give substance to these political exchanges.
The first political exchange is this: less waste, embezzlement and theft, by cutting spending on the purchase of goods and services against lower taxes for families by means of a deduction from taxable income for family members (e.g. dependent children and grandparents). The item purchases of goods and services of the public administration has exploded in the last five years. “Zero base budgeting” could be applied to this item, avoiding paying at the foot of the list as has been done up to now.
"Furthermore – adds Baldassarri – one could make it mandatory medical prescription 'by dose' and not 'per pack'. Currently the distribution takes place through pre-packaged boxes and in the vast majority of cases it results in an enormous waste of medicines by citizens and families. In fact, the pre-packaged doses hardly correspond exactly to those needed for the cure. On the contrary, it is much more frequent the case in which the pre-packaged doses are excessive with respect to the effective administration needs. Leftover drug quantities are thrown away even before they expire. In Italy there are about 21 million households and if each family keeps at home and disposes of only 200 euros of medicines once a year, this leads to a waste of about 4,2 billion euros a year on medicines”.
The second political exchange concerns companies and – explains Baldassarri – "consists in the transformation of all subsidies disbursed each year into tax credits. For over thirty years, the public budget has distributed an average of 40 billion euros each year in the form of production subsidies and capital transfers: the so-called "lost funds". The latest official data from 2011 indicates that the total of lost funds is around 42 billion euros. Of these, 4 billion come from European funds and 39 are disbursed from the Italian public budget. Even assuming that some of the items included in these transfers are not compressible because they concern installments of mortgages taken out in the past, investments by Anas, railways and local public transport, a total of 21 billion euros remain out of 38 on which you can leverage for this second political exchange. Even if these subsidies are the responsibility of the regions, their decision-making power and autonomy are in no way affected if one simply chooses to transform the subsidies into tax credits. The regions will always decide, only the modality changes: no longer ex-ante hard cash, but ex-post tax credits”.
The chairman of the Senate Finance Commission points out that "this operation frees up resources and therefore it is possible to proceed with reducing the tax burden on businesses, an objective that the spending review achieves through the exclusion of wage bills from the IRAP taxable base".
These two political exchanges find their place in 3 of the 6 amendments presented. He then proposes the introduction of a “conflict of interest”, which consists in the possibility given to families to deduct from their taxable income for Irpef purposes, up to a maximum limit of 3.000 euros a year, the expenses for the home, the family and care for the elderly: another amendment indicates an increase in public investment in infrastructure and in research and technological innovation. Finally, as regards the debt problem, an operation is proposed to valorise an important share of the huge public assets in order to reduce the huge Italian public debt by a very substantial amount and in a short time. The examination of the spending review will resume in the Budget commission at Palazzo Madama on Monday at 14 pm.
