Premier Matteo Renzi on Friday
confirmed a 10-billion euro income-tax cut for lower-income
earners, funded in part through permanent spending reductions to
defence, while insisting that health-care budgets would not be
touched.
"I am happy because we have disproved the (ill-wishers) who
have often wished that there would be no (financial) cover, and
also because this in general begins a process of reorganization
of the State," Renzi said after his cabinet approved a major
financial decree that included large tax cuts as well as minor
government reforms.
The 10 billion euros in income-tax cuts, which will affect
10 million Italians earning between 8,000 and 26,000 euros a
year, will be a permanent measure providing approximately 80
euros monthly, effective next month.
The decree, which contained no real surprises, also set a
salary cap for senior officials at State-controlled companies of
240,000 euros, adding that he hoped politicians would also
consider a similar move.
"The House and Senate will have to decide themselves, but
it would be a very nice gesture" if they followed suit, Renzi
told a news conference.
The cabinet decree also confirmed a 10% reduction to the
Irap regional business tax and released eight billion euros
payment of 68 billion euros in outstanding government debts to
businesses.
The measures will be covered by government cuts and savings
including 6.9 billion euros found for 2014, rising 14 billion
euros next year, through such measures as reducing government
office space, increasing efficiencies at the local, regional,
and national level, plus a deep reduction in the number of
government cars in use.
Renzi said those chauffered cars will be slashed to a mere
five cars per ministry, and everyone else "can take the bus or
walk".
He was adamant that health-care spending would not be
reduced, as had been rumoured after draft reports of Friday's
decree were released earlier in the week.
"If someone finds the word 'health' in the decree, I will
buy him a drink," he said.
Instead, 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.
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 other savings found for
this year in a major spending review exercise led by
Commissioner Carlo Cottarelli.
In a move towards greater accountability, Renzi also
announced that public offices, both at the local and national
level, must start publishing their expenses online within 60
days or face sanctions.
"The provision already existed, but without consequences.
Now if a local government doesn't provide all the data, we cut
funds," he said.
Friday's decree includes highlights of Renzi's larger
Economic and Financial Document (DEF) that aims to kick start
the sluggish economy.
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