Debate raged Friday between Senate
Speaker Pietro Grasso and Premier Matteo Renzi over whether the
cost of tax reductions, including a 10-billion-euro income-tax
cut, has actually be properly accounted for in the national
budget.
Grasso said that a study by Senate's economic research
office, which he defended as independent, has raised questions
about the tax plan contained in a decree which Renzi recently
pushed through parliament.
Renzi retorted that the decree has been properly "covered"
by cash freed from changes to spending, millions of euros
recovered from tracking down tax evaders, a new levy on
commercial banks, and sale of some State assets.
The Senate concerns were "technically false" and based on
flawed information, added Renzi.
In response, Grasso said that he was "guarantor of the
autonomy and independence" of the Senate research office and its
assessment of the affordability of the tax decree.
The Senate "is an institution that deserves respect," added
Grasso.
Renzi was going too far by showing disrespect for the
Senate and its budget review process, said Renato Brunetta,
House whip for the opposition Forza Italia (FI).
He added the Renzi appeared to be "on the verge of a
nervous breakdown, he does not know what he says, he insults
(and) provokes".
Defence of the Senate research office also came from junior
economy minister Stefano Fassina, a member of Renzi's own
Democratic Party (PD).
"The Senate Budget service, like the corresponding service
of the House, is an institution of excellence, with a high level
of professionalism and independence," said Fassina.
"This is serious, the continuous attacks of the premier on
an institution crucial to the independence of Parliament,"
Fassina added.
Renzi's budget decree included a 10-billion euro annual
income-tax cut for lower-income earners, worth an average
savings of about 80 euros per person per month, and will begin
part-way through this year so the total price tag for 2014 will
be about seven billion euros.
The cabinet decree also confirmed a 10% reduction to the
Irap regional business tax and released an eight-billion euro
payment on the 68 billion euros in outstanding government debts
to businesses.
On the revenue side of the ledger to cover the tax cuts,
Renzi announced that shifts and reductions in government
spending will total 6.9 billion euros for 2014, rising 14
billion euros next year, through such measures as reducing
government office space, increasing efficiency at the local,
regional, and national level, plus a deep reduction in the
number of government cars in use.
As well, about 400 million euros will be saved from
trimming the defence ministry, including 150 million euros from
a review of the F-35 fighter-jet program, Renzi has said.
Other sources will include a new levy on private-sector
banks that are parking money inside the central bank, worth an
estimated 1.4 billion euros, as well as savings found for this
year in a major spending-review exercise led by Commissioner
Carlo Cottarelli.
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