Italy : 2019 budget proposal now omitting the citizen’s income and the pension reforms (in brief)

With the European Commission calling on Italy to re-submit its 2019 budget proposal or risk sanctions for excessive debt levels, the revised text started out on its parliamentary route on 05 November. The new text diverges from that which was adopted by the Council of Ministers in October and notably two key measures fervently backed by the two ruling parties, The League and the Five Star Movement, are missing, and this despite that fact that Article 21 had freed funds to this effect, namely € 9 billion for the citizen’s income measure and €6.7 billion for more flexible pensions. The budget will review the details covering both measures, and they will most likely be addressed in a few weeks time by way of decree-laws, or failing that by parliamentary amendments. Thus Conte’s government finds itself with some room for financial maneuver in so far as the draft budget intends for funds not deployed for certain measures to be subsequently deployed for others (so for example according to certain commentators the funds can be redirected to buffering the State’s coffers if needed). The text currently before parliament also contains other changes, and in particular a reduction in social charges for companies that next year hire the top third level education graduates on permanent employment contracts, as well as lower corporate taxes for companies that have increased headcount during 2018. The ‘technical relationship’, which partners the budget also intends for a radical reduction in the ‘l’alternanza scuola-lavoro’ dual employment/school work courses, which are mandatory in the general level senior secondary schools, and will fall from 200 hours currently down to 90, with those in the technical and occupational vocational schools set to fall from 400 hours currently to 150 hours and 180 hours respectively.