Pedro Sánchez faces the challenge of obtaining the necessary parliamentary support to get what needs to be done. end General State Budget for this legislature of the current coalition government. PP and Vox They have already announced that they are preparing to amend the entire text, and there are doubts as to whether other usual partners of the Government – such as PNV or ERC – will do the same. A buildup of changes in integrity could result in overturning the bill – the ERC already did in February 2019 – and cause the Budgets to be extended from 2022 to 2023. Then what about all the measures announced or planned in advance? Budget policy experts explain that everything, absolutely everything, can be reconsidered through royal decree laws. The problem was that each would have to be approved. congress of deputies by the same majority of votes that previously discredited the General Accounts. In addition, as Airef president Cristina Herrero argued at the Congress of Deputies this Tuesday, the Budget will lose its meaning as the main tool of economic policy because of predictability and accountability.
1. How does the budget extension work?
When a Parliament does not approve the next year’s Budgets before 31 December, starting budgets of the previous year With effect from 1 January. This has happened on numerous occasions, both in the State and in other autonomous communities and municipalities. Another issue is that before the arrival of 1 January, the Government decided to pass a decree known as the “budget extension decree”, which in practice served to combine the most urgent measures that the Executive wanted to take effect on 1 January. because the salary increase was agreed with the authorities.
2. What will happen to public salaries?
Automatic extension of some Budgets results in freezing of salaries of civil servants, Compared to the previous year. The government has agreed with the unions a 2.5 percent salary increase that could reach 3.5 percent for 2023. With an ‘extension decree’ approved before the end of 2022, the government may decide that there are “reasons of urgency and necessity” to produce and implement the agreed salary increase, effective from 1 January, or even later. , related budget change (credit supplement).
3. And with a pension?
In this case, even a decree law would not be necessary to apply an increase in pensions equal to the average change in the consumer price index (CPI) between November 2021 and November 2022, effective January 1, 2023. will be anticipated about 8.5%. The increase will be implemented on 1 January without the need for an ‘ad hoc’ decree, with or without a new Budget, and this is because the rule of raising pensions is a requirement stemming from the Social Security Law. and because the pension item has an “expandable credit” requirement; that is, the payment obligation must be met without any budgetary constraints. Payment of unemployment benefit is another of the expandable credits of the Budgets.
4. What about anti-crisis measures?
The government has conveyed to the European Commission its intention to implement a similar spending measure in 2023 against the energy crisis and inflation, which was approximately 10,000 million in 2022. Specifically, bonus in 2022 Gasoline 20 cents per liter, dissemination of sectoral aid energy bondsdiscounts on travel passes, an additional increase Minimum Living Income and minimum pensions and other measures. The government has yet to announce which of these measures it plans to expand or whether it will design new ones. But that same Tuesday, the Cabinet approved another additional package of 3,000 million, valid until 31 December 2023. If there is no new Budget, any of these measures can be included in a decree law with the relevant mandate. of the loan supplement or extraordinary loan– To be implemented in 2023, yes, it must be approved by the Parliament.
5. Is it possible to extend tax refunds?
The government may also include in a decree law measures such as: VAT deduction of gas and electricity or any other VAT effective in 2022 energy crisis. It can also accept tax increases and reductions seen in the budget project by decree. In terms of taxes, any changes to existing taxes can be made by decree with the approval of the Parliament. To create a tax, a law is required, such as the law currently being processed in Congress to impose new rates on banking and energy, which the Treasury plans to introduce the creation of taxes by partial amendment. New solidarity tax for three million euros of wealth. It doesn’t matter if there is a new Budget in 2023 for any of these Government plans.
6. Will the execution of European funds be affected?
Allowances sent for investment are generally the only allowances that are not extended. the following year when a Budget is not approved. The reasoning makes sense: There’s no point in extending an item for a completed job if the 2022 Budget has built up credit for a specific new path. This principle may jeopardize the planning of investments planned for 2023, co-financed with European funds. But once again, this is not a problem that cannot be resolved by the approval of one or more royal decrees and the corresponding extraordinary loans, according to experts in budgetary techniques.
7. What about planned transfers for autonomies and municipal councils?
In principle, if the 2022 Budgets are extended to 2023 Transfers from state to autonomous communities will not grow the expected 24% they will be deprived of the 26,130 million increase, which will increase this figure to 134,336 million. Once again this shock can be resolved by a decree law. In 2019, this has already happened, and Finance Minister María Jesús Montero has obtained the approval of the State Prosecutor to resolve the issue through a decree-law, while promoting legal reform to avoid subsequent legal doubts.