ROME, Nov 20 (Reuters) – Italy’s new right-wing government plans to announce around 30 billion euros in new spending on Monday in next year’s budget, mainly to reduce the impact of high energy prices and halt some of the steep increases. election promises.
The ongoing energy crisis, sparked by Russia’s invasion of Ukraine, means Prime Minister Giorgia Meloni and her allies are unable to deliver on their pre-election promises, including tax cuts.
“We cannot do everything, at once. Previous attempts to do this have ended in trouble,” Industry Minister Adolfo Urso told La Stampa newspaper on Sunday.
Meloni has already said that about two-thirds of the additional money will be used to help companies and families survive the high gas and electricity bills. This comes on top of around 75 billion euros released in 2022 to deal with rising energy prices.
The cabinet this month raised the 2023 interest rate to 4.5% of gross domestic product from the 3.4% set by Mario Draghi’s previous government. But ministers have said they will be prudent, avoiding the budget blunders that bedeviled former British Prime Minister Liz Truss.
As a result, the right-wing League party’s promises of generous pension reforms have been delayed, and while the budget will include tax cuts for workers, major tax cuts have yet to materialise.
In order to help families to face the rise in prices, which under the EU-harmonized index hit 12.6% year-on-year in October, the minister is considering removing the sales tax on essential products such as milk and bread.
Additional borrowing will cover some of the costs, but around 3 billion euros in new revenue is expected to be raised through a tax on the profits of powerful companies that have benefited from high oil and gas prices.
In order to raise money, Meloni is also expected to start restoring the “citizen’s wages” of poverty.
The left-wing parties say this is necessary because of the economic crisis, but the coalition parties say it is causing the unemployed to flee the labor market.
“(Payments) will be suspended for those aged 18-59 who can work. But it will not happen all at once. There will be a phase of change in 2023,” the secretary of state Giovanbattista Fazzolari told the Corriere della Sera newspaper.
Once the minister approves the budget, the parliament will have until 31 Dec.
($1 = 0.9686 euros)
Crispian Balmer Reports Editing by Peter Graff
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