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Here are the main things included in Italy’s ‘people’s budget’

From an amnesty on unpaid taxes to a universal basic income, here's what you need to know about Italy's 2019 budget plans.

Here are the main things included in Italy's 'people's budget'
From L to R: Deputy Prime Minister Matteo Salvini, Prime Minister Giuseppe Conte and Deputy Prime Minister Luigi Di Maio present Italy's draft budget. Photo: Filippo Monteforte/AFP

Italy's populist coalition has submitted its draft 2019 budget to the European Commission, forecasting an increase in the public deficit to 2.4 percent of gross domestic product.

The increase is essentially due to what the government calls its “people's budget”, a series of spending, pension and tax changes that will cost €37 billion, of which €22 billion will be paid for by expanding the deficit.

Here are the main points:

Pension reform

The budget modifies the previous Fornero pension law to make it easier to retire earlier.

It introduces the “100 quota”: a state pension if the number of years of contributions paid plus age equals 100. Around 400,000 people will then be able to retire at 62, having worked at least 38 years. The law currently sets retirement at 65.

Women will still be able to retire at 58 if employed and at 59 if self-employed, provided they have worked for 35 years.

The reform will come into effect in February and cost €7 billion in 2019, according to Deputy Prime Minister Matteo Salvini of the League party.

The government hopes that more people retiring will provide more jobs for the young, with unemployment for those aged 15-34 at nearly 20 percent.

Citizen's income

The budget also provides for a universal basic income, the populist Five Star Movement's (M5S) main campaign promise.

The monthly payment of €780 will be made to the least well-off and hopes to help people get back on the job market. It is only for Italians or foreigners who have been legally resident for at least five years.

The budget also provides for a “citizen's pension” which raises the minimum pension to €780 a month, “returning dignity to pensioners”, according to M5S leader Luigi Di Maio.

The two measures will affect around 6 million people and cost €9 billion, with another billion to be spent on improving job centres.

Tax amnesty

The two ruling parties agreed to a tax amnesty after a heated debate, with the anti-establishment M5S having felt such a measure would favour the rich and be against its ideals.

It will affect anyone who has not paid, declared or under-declared taxes. The treasury expects to reap €2.2 billion from people thus putting their books in order in 2019.

Flat tax

A flat-rate tax of 15 percent will be applied to more than one million self-employed and artisans with a turnover of under €65,000.

Bank victims fund

A €1.5 billion fund will be created to compensate small investors who have lost money because of bank bankruptcy or mismanagement.

Public investments

Technocrat Prime Minister Giuseppe Conte plans to invest another €15 billion in “the biggest Italian public investment plan ever” over the next three years, on top of €38 billion already planned over the next 15 years.

No VAT hike

The previous budget set an automatic increase in value added tax, considered a tax on the poor. The government will cancel the automatic hike, slashing €12.5 billion in annual revenue.

Spending cuts on migrants and lawmakers

The budget aims to slash the cost of running ministries by €500 million a year. So-called “golden” pensions for lawmakers of over €4,500 net a month will also be reduced, saving the government around €330 million a year, according to M5S sources.

The government will reduce spending on managing and housing migrants by another €500 million.

It will also raise taxes on gambling and increase privatisations, generating a projected €640 million next year. 

READ ALSO: Italy's budget clash with Brussels: What you need to know


Photo: Gerard Cerles/AFP

By AFP's Céline Cornu

TERRORISM

Italy on maximum terror alert over Easter after Moscow attack

Italy was to increase surveillance in busy areas ahead of the Easter holidays and following the bombing of a Moscow concert hall, ministers agreed on Monday.

Italy on maximum terror alert over Easter after Moscow attack

Italy’s national committee for public security, chaired by Interior Minister Matteo Piantedosi, on Monday said anti-terrorism monitoring in Italy must be strengthened ahead of the Easter holidays, with more surveillance to be carried out at popular tourist spots and at “sensitive sites”.

The committee agreed on “the importance of continuing monitoring activity, including online, by police and intelligence forces for the identification of possible risk situations” in Italy, reported news agency Ansa.

The security meeting was convened following the terrorist attack in Moscow on Friday where armed men opened fire and set the building ablaze, killing at least 133 people.

Deputy Prime Minister and Foreign Minister Antonio Tajani had stressed to the public on Sunday that Italy faced “no concrete risk” and said the country’s security and law enforcement services were “always on the alert to prevent any attack.”

“During the Easter holidays you will need to be very careful. We will always do the utmost to ensure the safety of citizens and tourists,” Tajani said, speaking on national broadcaster Rai’s current affairs show Restart.

READ ALSO: Terror alerts: Should I be worried about travelling to Italy?

The fight against terrorism “has nothing to do with the war in Ukraine,” the minister continued.

“We support Ukraine” as an invaded country in which international law has been violated, he said, “but as the Italian government we have expressed our condemnation of the attack [in Moscow] and closeness to the families of the victims and the survivors”.

Cabinet Secretary Alfredo Mantovano said on the same programme that the main terrorist threat Italy faced at the moment was mainly from “lone wolves” and “not so much from organised groups.”

“I believe that a group like the one that acted in the Moscow attack, which must have been trained and had logistical support, would be intercepted sooner in Italy,” he said.

“The most worrying threat” in Italy was online recruitment, he said, noting that propaganda was closely monitored.

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