Wed. Apr 24th, 2019

Social Fridays will gain a billion euros in the 2019 deficit

Social Fridays will gain a billion euros in the 2019 deficit


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MadridUpdated:

The barrage of decrees laws that the government has approved since the call for elections, the so-called "social fridays", leave an invoice for this year of almost one billion euros, specifically, 920 million. This is how the Independent Authority of Fiscal Responsibility (Airef), which has presented this morning its Report on the Initial Budgets of the Public Administrations in which it figures in the 2.1% of GDP its deficit forecast, that is, 10,000 million above the objective of 1.3%.

Is the fault of this deviation the non-approval of the Budgets, as the Government wields? No, in fact the Airef maintains that the opposite is true: the absence of accounts it causes the deficit to decrease more quickly, since despite the approval of decrees, all the expenditure measures contained in the Budgets, which amounted to 5,250 million, have not come into force.

The expenses will be like this 3,700 million less than what is contained in the accounts, which compensates the increase in income due to the increase in taxes, which the Airef estimated at 2,908 million, well below the 5,654 that the Treasury presumed: the balance causes with the extension the deficit will be improved in 792 million.

A figure that would be 920 million higher without social friday: finally and by decree, the 138 million minimum vital income, 242 million of the susbidosidio for unemployed over 52 years, 225 for the increase of paternity leave of 5 to 8 weeks and for the increase of the security fees have entered Social caregivers while the long-term unemployed training plan that is approved today is not contemplated. As ABC reported, if you take the multi-year cost of measures such as the increase in paternity leave, the impact is considerably higher, almost 4,000 million.

In fact, as ABC advanced, the Treasury plans consist of adjusting investments so that the deficit is reduced, the accounts contained 2.320 million increase in investments that, by not executing, explain most of this reduction of the deficit in front of a scenario with Budgets. The accounts contained an increase of 20% of investments, above all, railways. In spite of everything, the Airef believes that the structural adjustment will be null, which will be entirely due to economic growth, which is why Spain risks the European Commission opening a significant deviation procedure since the objective of Brussels is that this cut be 0.6% of GDP by 2019.

Autonomies and municipalities, compliers

The Airef has predicted that the autonomous communities will meet the target of 0.1% of GDP if the deliveries on account are updated with the additional VAT month of 2017 (if not, they will go to 0.3%, 2.5 billion additional) the Central Administration will triple its goal of 0.3% to finish at 1%, the municipalities would repeat a surplus similar to 0.5% in 2019 while the Social Security would have a 1.4% hole, 6,000 million more than its goal of 0.9%.

Despite this, the Airef improves its forecasts by one tenth for the system due to the strong increase in prices in 2018, which made its deficit smaller than originally estimated. However, the spending on pensions will increase considerably in 2019: 1.6% of the increase is due to the substitution effect of more retirees with higher pensions compared to those who leave the system, another 1.6% is due to the revaluation with the CPI, 1.2% is for the compensation of the deviation of a tenth that occurred in 2018 and another 1.2% because there are more pensioners, as the withdrawal of the baby boom generation approaches.

In taxes, the one that most afflicts that have not approved the tax increases that the Government envisaged is that of Societies, which will reduce its collection in 2019 in the eyes of Airef by 0.2%, despite economic growth. The VAT will increase by 4.4% your income at the expense of consumption and the IRPF, by 3.9% for the salary and employment awakening.

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