September 18, 2020

The tax authority questions the “grievance” investor in state infrastructure in Catalonia


The Independent Authority for Fiscal Responsibility (AIReF) has demolished the alleged grievance over investments in state infrastructure in Catalonia. In your report Transport infrastructure, which has been made public this Thursday, the regulatory body led by Cristina Herrero is blunt in pointing out that Catalonia is the autonomous community that has received the largest investment in infrastructure in the period 1985-2018. Both in gross nominal investment in that period of time and in net capital in transport infrastructure, the Catalan community is at the forefront of the autonomies of Spain. When the analysis is carried out by relating the investment to the number of inhabitants. Catalonia is the only one of the most populated communities that is above the Spanish average in gross investment per inhabitant.

The last occasion in which the President of the Generalitat, Quim Torra, exposed the “structural deficit” in investments in Catalan infrastructure by the State, was in the presentation of a study by the Barcelona Chamber of Commerce with its President , the independentista businessman Joan Canadell last December 2019. Then, Torra and Canadell assured among the “grievance memorial” that since 2001 they had stopped investing in Catalonia 8,000 million in infrastructure and that the investment should correspond to the equivalent of the weight of the Catalan GDP in the whole of Spain, which is 19%.

AIReF explains in its document that Spain has been, by far, the country that has invested the most in transport infrastructure compared to the other four major European states in the period 1985-2018: “In relation to gross added value ( VAB), its investment has been 42% higher than that of France, double that of Germany and 60% higher than that of Italy “.

This period culminates in 2009 when, due to the cuts caused by the financial crisis, spending began to gradually decrease until 2018, when the ratio of investment in transport infrastructure to GDP since 1985 was reached. Since 1986, it has invested an annual average of 13,500 million euros in transport infrastructure, placing its current stock at more than 420,000 million euros, although AIReF itself rules out that correct criteria have been followed when considering these investments.

The distribution between the administrations shows that the Central made 56% of all the investment of the public administrations, the autonomous communities 31% and the local corporations the remaining 13%, according to the AIReF report. The road network has been the most outstandingly the one that has received the greatest investment effort in the period 1985-2018, monopolizing on average 54.8% of spending. The railroad reached 31.2%, while airports and ports had a similar weight, around 7% each.

Despite the continuous complaints from Catalonia about the “structural deficit” of State investments in this autonomous community, the reality is that the report from the tax authority establishes that Catalonia is the community that absorbed the most investment in the study period of these 33 years: 15.8%.

Behind Catalonia is Andalusia, with 14.6% of the total invested in infrastructure. Third, the Community of Madrid is located further away, a territory in which 11% of the total for the period 1985-2018 has been invested. These three communities concentrate 41% of total spending in the 33 years covered by the study. While three other communities, Castilla y León (9.5%), Galicia (8.6%) and the Valencian Community (8.4%) have received more than 8% of the investment. Cantabria, Illes Balears, Navarra and La Rioja do not reach 2%.

The tax authority also monitors the evolution of the stock since 1985, which allows it to highlight the strong dynamism shown by capital in infrastructures, with growths higher than those of GDP and population and that the increase in capital in infrastructures exceeded that of capital total net of the Spanish economy. With the crisis, infrastructure capital fell in absolute values. This fact indicates that since 2013 the investment has not been sufficient to cover the depreciation, causing the net stock to contract.

When making a territorial analysis, Catalonia is the autonomous community that concentrates the most capital on infrastructure with almost 17% of the Spanish total, well ahead of Andalusia, which slightly exceeds 14%, and Madrid, with 10%. Between the three they concentrate 41.4% of the total. They are followed by Castilla y León, Galicia, and the Valencian Community, which add 27.1% more to the previous percentage, so that between the first six they gather 68.5% of the total capital. At the lower end are five uniprovincial communities, La Rioja, Comunidad Foral de Navarra, Illes Balears, Cantabria and Región de Murcia.

The fiscal authority points out that there are “important differences in the capital endowments enjoyed by the different communities that depend on the indicator used to relativize the size of the regions: population, GVA or area.” But when doing this research Catalonia is the community that in all three cases is at the top of the ranking, it is the region that has the most nominal net capital in transport infrastructure in relation to population, GDP and area.

When AIReF analysts add the variable time, they conclude that “there are no major changes in the territorial distribution of the infrastructure stock, although six communities have lost weight in the distribution between 1985 and 2018: the Basque Country, Aragon, Asturias, the Canary Islands, Illes Balears, Comunidad Foral de Navarra and La Rioja. The most striking falls are those of the Basque Country between 1985 and 2018, and the Community of Madrid between 2007 and 2018 “.

The Autonomous Community that does not fall from the first position due to endowments of net capital in infrastructure is Catalonia. In 1985, it is the first autonomy by endowment of capital, exceeding 15% of the total, but in 2018, it is the only autonomous community that remains above 15%.

The tax authority notes that “interregional inequalities have remained practically constant over time.”

Based on population criteria, the classification changes. AIReF thus highlights them by relating investment to the number of inhabitants, when relatively sparsely populated and low-density communities appear in the first places. In this way, the two Castillas and Aragón, as well as the northern communities of Asturias, Cantabria and Galicia head the investment per inhabitant classification.

In this classification, taking into account expenditure by population, the most populated regions such as Andalusia, Catalonia, Madrid and the Valencian Community descend, but as a paradox of the high level of investment, only Catalonia remains above the Spanish average.

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