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Fact box: Renzi's plan to revive weak economy

Social programs boosted, while low-income earners given break

13 March, 16:15
Fact box: Renzi's plan to revive weak economy

(ANSA) - Rome, March 13 - Premier Matteo Renzi has announced a series of new measures aimed at triggering economic growth including plans to cut income taxes by 10 billion euros, invest 1.74 billion euros in social housing programs, spend 3.5 billion euros on schools, and repay 68 billion euros in outstanding bills for government services.

Here are a few more details of the plans to be put into effect by July when Italy takes over the rotating presidency of the European Union.

TAX CUTS: These are expected to take effect quickly with the first reductions appearing after May 27. Personal income tax is to be cut by more than 1,000 euros per year, or about 80 euros monthly, directly affecting the pay cheques of workers earning less than 1,500 euros per month. The measure covers 10 million people and budgeted to cost 10 billion euros.

IRAP CUTS: Business to benefit from a 10% reduction in the regional Irap tax, to be funded by a tax increase to 26% from the current 20% on investment income earned (excluding Treasury bonds).

BILL PAYMENTS: Fully 68 billion euros in outstanding bills to be paid by July from government to business. Previous governments had paid about 22 billion so far. The payment scheme will involve support from the State-owned funding agency Cassa Depositi e Prestiti which will offer credit to businesses which they can take to their banks. JOBS ACT: Proposals for the first phase of the act would include temporary contracts that can run up to three years, as well as simplified apprenticeship programs. In a later phase, universal assistance for the unemployed, including a pool of 1.5 billion euros, could provide assistance for about 900,000 people.

CREDIT FOR SMALL BUSINESS: Simplified processes to obtain credit from a national fund to be increased by 500 million euros. Electricity bills to be reduced by 10% to 1.4 billion euros from 1.5 billion euros by year end.

ANTI-CORRUPTION: Renzi's cabinet has appointed a new anti-corruption commissioner Raffaele Cantone, with the goal of improving Italy's standing in international measures of corruption.

SCHOOLS: Renzi announced 3.5 billion euros in new spending on crumbling school buildings, through a credit line that can be drawn on by municipalities and regions. The process to access funding is to be simplified.

ENVIRONMENT: A fund of 1.5 billion euros is to be made available in April for protection of land. As well, the number of cars used by senior administration is to be cut and about 1,500 vehicles auctioned on the Internet between March 26 and April 16. Renzi says he oversaw a similar program as mayor of Florence.

HOUSING: The government has launched a 1.7 billion euro housing plan, including tax breaks for owners who rent to social-housing tenants. The program will increase the stock of social housing and devote 200 million euros in new funding for controlled rents.

FUNDING: The overall program is to be funded in part through spending cuts, says Economy Minister Pier Carlo Padoan.

For 2014, 10 billion euros for tax cuts will be partly funded from money freed through the spending review. That review is expected to save as much as seven billion euros in 2014, with conservative estimates suggesting as little as three billion euros.

Other funds will be provided by savings from lower interest rate costs for government.