Thursday, May 19

skyrocketing expenses with increased taxes

The Government presents today in the Congress of Deputies the public accounts for 2022, an explosion of unknown spending with which it wants to combat the ravages of Covid. The deState expenditure will remain at maximum despite the fact that the extraordinary aid that was launched during the pandemic will decline. Now spending changes its recipient and focuses on young people, the unemployed and civil servants. And all this with the help of 27,000 million euros from the European recovery plan that have not yet arrived. With these resources, the Government intends to underpin the recovery in 2022, with a growth of the Spanish economy of 7% and an increase in employment of 2.7%, which

will reduce the unemployment rate to 14.1%, a macroeconomic scenario that yesterday he broke the International Monetary Fund with its forecasts downward.

The Budget project foresees a total consolidated expense of State, Social Security and autonomous organizations of 458,970 million, an amount similar to that budgeted for this year, in which almost all expenditure items increased, except unemployment, vaccines and public debt due to the better evolution of the health crisis and interest rates. Social spending represents 54.1% of consolidated spending and investment items total 40,000 million, half of which will be financed from European funds.

These are the big keys of the public accounts for next year:

Retirements will rise more than 2%

Budgets guarantee the maintenance of the purchasing power of pensions, but the rise will be determined by the average inflation resulting from this exercise, which the Executive estimates could be around 2.3%. The revaluation formula is the one set by the first part of the pension reform already being processed by Parliament, according to which the calculation basis will be the average inflation of the 12 months prior to November. The inflation that results at the end of the year is also what will determine, for its part, the amount of the “pay” that retirees will receive in early 2022 to compensate them for the loss of purchasing power, given that their incomes rose 0.9% at the end of the year and prices are already at 4%. What the public accounts do determine is that the minimum and non-contributory pensions will rise 3%. The Minimum Vital Income will also increase by 3%, with a provision of 4,436 million euros.

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Pensions: almost 40% of state spending

The Budgets with the highest expenditure in the history of our country, those of 2022, would not be such without the millionaire item dedicated to paying the payroll of the nine million people who receive a pension in our country. Pensions will once again become the largest state expenditure for next year, 171,165 million euros, and they do so after growing at a rate of 4.8% and at a time of maximum uncertainty for our system: the sustainability factor having been repealed and without the substitute, the intergenerational equity mechanism, having been approved. The payrolls of retirees will already take almost 40% of state spending. A new record.

Hack to pension plans: contributions are reduced to 1,500 euros

In 2022 there will be a new punishment for private savings with cuts in the maximum that can be contributed to individual pension plans, which will be reduced again and will remain at 1,500 euros. On the contrary, contributions to collective business plans are revised upwards, from 8,000 euros to 8,500 euros. The new setback for private savings responds to the strategy of Minister Escrivá, who with this roadmap seeks to promote collective saving as a formula to compensate for lower future pensions.

The payroll of public employees grows 2%

The personnel expenses included in the Budget grew by 3.4% due to the 2% increase in the salaries of 3 million public employees and also due to the increase in positions in the Public Function. The replacement rate stands at 110% as a general rate; 120% for health, education, science and, finally, 125% for the State Security Forces and Bodies, regional and local police.

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Housing and cultural voucher for young people

A youth voucher is launched for the rent of 250 euros per month. It will be aimed at young people between 18 and 35 years of age with work who do not receive an annual salary exceeding 23,725 euros. It will involve an expense of 200 million euros. At first, the Minister of Finance limited this help to those rental contracts of up to 600 euros, but sources of the Treasury quickly qualified his words, ensuring that this amount referred to the rental aid of the State Plan for Access to Housing 2022 -2025 and not the youth bond. With the accounts it is also created a bonus of 400 euros so that around half a million young people who reach the age of majority spend it on culture. Bulls are excluded from the measure. Along with this, a record 2,199 million euros is expected for scholarships in education. The Ministry of Justice will also launch a scholarship system for aspiring judge, prosecutor or state attorney.

Minimum rate of companies of 15%

The Government sets a minimum rate of 15% in Corporation Tax for large companies, with which it intends to collect an extra 400 million euros. Tax collection will grow by 8% next year, reaching 232,352 million, marking a new all-time high that will include those around 400 million that the rise in Companies will contribute. From CEOE they have regretted that putting a limit on this tax It will harm the most internationalized companies and that, in addition, make a greater effort in research and development.

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7% and 14.1% growth in the unemployment rate

The public accounts for 2022 estimate economic growth of 7% and an increase in employment of 2.7%, which will reduce the unemployment rate to 14.1%. The deficit will be reduced to 5% of GDP, according to government forecasts thanks to the 8.1% rise in tax revenue compared to the end of this year. Without European funds, the spending ceiling would stand at 169,787 million, 0.7% more. The investment will exceed 40,000 million.

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