It is not to extinguish the enthusiasm that is dripping from the electoral programs of these days, full of taxes that go down, pensions that go up, taxes that disappear on food and energy and fourteenths that sprout from the state in the paychecks. But it must be remembered that next autumn’s budget law, the first commitment of the government that will come out of the polls, will have to deal with a complicated economic context: which presents a mortgage on the accounts of at least 25 billion, made up of mandatory measures or almost, while the slowdown in growth foreseen by all reduces the starting room for maneuver by another fifteen billion.
The boulder of inflation
The boulder that is rolling on public accounts is produced by inflation, both the one already recorded and the one that will still occur next year, once the initial hypotheses of a temporary flare-up have been dissolved. From this point of view, the first sign of a cooling in the US is little comforting, where the price rush is driven by the intensity of the demand for goods and services and not by the shortage of supply as we do here.
The weight of indexation of pensions
The first problem, in any case, is the inflation that has already occurred. Which first of all imposes the indexation of pensions, on which the Aid-bis decree intervened but with an advance in mini format, one billion euros in all. Part of this additional expenditure is already discounted by public finance trends, because the April Def calculated for this year consumer inflation in the order of 5.8%. In July, however, Istat calculated a rate of 7.9%, therefore more than a third higher than the figure of the Def. With such a pace, the revaluation could cost up to 6 billion more than expected: compulsory expenditure, unless indexation is to be denied by law.
New state contract worth almost 10 billion
The cost of living also multiplies the resources for the renewal of the state contract. The agreements signed in recent months concern 2019/21, and for the sectors financed by the state (ministries, tax agencies, non-economic public bodies and schools) they produce an expenditure of 3.78 billion per year. With the consumer price index indicated by the Def, which in any case will be updated upwards in the autumn, the new contract would cost the State just under 10 billion. And for the moment, the public accounts provide for only 500 million per year. The delay in state contracts is usual, so you can decide not to finance the entire renewal in the next maneuver, waiting for the last year of the three-year period to then get to the renewals when the reference period has now expired. But even if we cover only half of the costs for now, as happened in the past, we need about 5 billion.
To confirm the wedge cut, 4.5 billion is needed on an annual basis
Nor is it mandatory to confirm the tax wedge cut made in two stages by the Draghi government. But not doing so would mean reducing the income of employees by a figure of up to 220 euros from 1 January, and going against the electoral promises. The replication of the 2% contribution discount for incomes up to 35 thousand euros costs 4.5 billion on an annual basis.