The spending review game is in full swing and this year could be more decisive than in the past. This is demonstrated by the public accounts of 2016, on which the Government is already trying to find the balance. Prime Minister Matteo Renzi has promised to cut the Tasi, but – as Federico Fubini writes in Il Corriere della Sera – to do so, he will need a maneuver worth at least 23 billion euros.
Of these, 16 billion will serve to avoid triggering the VAT increases envisaged by safeguard clauses contained in old provisions: in theory, 2 billions will come from lower interest payments, 4 from the greatest growth and well 10 right from the spending review.
The other 7 billions that are missing to reach 23 could be used to cancel the Tasi, help the poor or extend the relief for those who take on permanent contracts. These latter measures, however, are likely to be deficit financed. It is therefore clear how important the spending review is for the overall stability of the budget.
But what to foresee the plan elaborated up to now? The spending review commissioner Yoram Gutgeld and the councilor of Palazzo Chigi Roberto Perotti will present a project to the Government which plans to distribute the cuts among different sectors: from health care spending to public transport and local public services, from the purchase of goods and of ministries and directors' fees, from Anas and Railways to invalidity pensions. However, the most difficult matches are played on the field of concessions and subsidiaries.
CUTS IN TAX BENEFITS
The jungle of Italian tax breaks is worth 161,14 billion euros, against 442 billion in total tax revenues. Here are some of the main entries.
- Parties: a 1972 law allows them not to pay "government concessions" when signing articles of incorporation or statutes.
- Insurance: under a 1961 law, they enjoy three types of policy exemptions, for a total of 2,3 billion. But cutting these reliefs would also affect millions of insured citizens.
- banks: the substitute tax on home loans is worth two billion a year, but in this case cutting the subsidy would mean indirectly affecting citizens who want to buy a house.
- Agriculture: the sector enjoys 13 types of exemptions for a total of 2,3 billion.
- Trucking: a 2007 law guarantees reductions of 1,14 billion a year on fuel excise duties. Since oil is now cheaper, the relief could be canceled or reduced.
- Cooperative: for agricultural ones the subsidy is worth 88,5 million a year. For all the others, the millions are hundreds.
- Editorial office: the reliefs are worth 173 million a year.
- Taxi drivers: 30 million a year.
- gas stations: 110 million a year.
- Cinema managers: 26 million a year.
- Wealthy families: 133 million a year for nannies and carers.
- Shipowners: tax credits for 180 million a year (but only because this also happens in Greece, where, however, the tax relief is about to be cut).
- Airline companies: fuel tax relief is worth 1,5 billion, imitating what happens in France and Germany.
- Maritime transport: subsidies worth 600 million a year to support European competition.
PARTICIPATE
As for the subsidiaries, the law 244 of 2007 requires them to abandon all activities unrelated to "institutional purposes", but the Court of Auditors has shown that today two thirds of the companies in question still operate in sectors that have nothing to do with with their territorial government tasks. Not only that: the 2015 budget imposed "rationalization plans" by March, but about half of the local authorities ignored the request.
An imminent implementing decree of the public administration reform could once again require the administrations to exit subsidiaries unrelated to their institutional purposes, but this time the spending review could bring with it something new: sanctions for shareholders or managers who ignore the law.
