Budget: from pensions to banks, an uphill struggle to secure funding

Italia is ageing; one in four people is over 65, in the midst of a demographic crisis that complicates the picture for the Budget Law. Pension expenditure already exceeds 15 per cent of GDP, amounting to 366.54 billion, and according to DPFP estimates, by 2027 – barring new measures to reform the pension system – it will rise by more than 14.7 billion under current legislation. Hence the suggestion of a tightening on the indexation of the highest pensions, as reported by some media outlets, although this currently finds no concrete support within the majority. The budget bill is still to be finalised, whilst the wish list is growing and pushing up the expenditure to be covered.

Deputy Prime Minister Antonio Tajani has reiterated Forza Italia’s priority: a tax-free zone for young people up to the age of 35 and tax relief on thirteenth-month bonuses for low-wage workers and pensioners alike. Because ‘there is a right not to emigrate’ and a right to ‘make ends meet’, he emphasised. For the Lega, it is the Under-Secretary for Labour, Claudio Durigon, who sets out the key points. The flagship proposal is early retirement at 64 as an option for everyone, with pensions recalculated on a contribution-based basis. ‘I believe this could provide a significant solution, whilst also promoting generational renewal,’ he said. For young people, the main proposal is a 5 per cent tax rate on salary increases for the first five years, a point which the Minister for the Economy, Giancarlo Giorgetti, is also considering.

Durigon also returns to the subject of the possibility of a price cap on utility bills, similar to that applied by Eni and other companies to fuel prices. “I’m thinking of a cap with updated rates, which could change in line with market trends,” he explains. “Discussions are already underway. I’m thinking of companies such as Enel and Eni. I believe we can find a mutually agreed solution.”

The government is hoping for further assistance from banks and insurance companies to balance the books – a voluntary contribution which, according to Matteo Salvini, should amount to at least 5 billion euros. But it will not take the form of what Antonio Tajani has called ‘a hateful tax on windfall profits’. ‘We have insisted on a different approach, not because we do not want them to make a contribution to the State, but because of the method we have adopted – namely, dialogue and discussion without imposing taxes,’ stated the leader of Forza Italia.

We will learn more about the government’s plans as early as today, with Giorgetti’s hearing before the joint committees of the Chamber of Deputies and the Senate. The following day, the Council of Ministers will examine the Public Finance Document to be sent to Brussels, setting out the framework for the budget. Parliament, meanwhile, will vote on the resolution on the Public Finance Document and on the budget deviation of 28.8 billion linked to the activation of the EU safeguard clause (NEC) for defence and energy. Elly Schlein has already announced that the PD will vote against it. ‘We are opposed to this,’ she stated at the Confersercenti Forum, ‘the priority has been to increase military spending by 14 billion to reach 5 per cent of GDP. Instead of raising military spending to 5 per cent, we must raise healthcare spending to 7 per cent of GDP.’