Stepping out for grey power - Carvajal Spain

2 SUR IN ENGLISH OCTOBER 2ND TO 8TH 2009
News
Government raises taxes
to help reduce deficit
The proposed
budget bill for
2010 was
presented to
Parliament on
Tuesday amid
criticism from
the opposition
COLPISA / EFE
The proposed tax hikes in the
budget bill announced by the
Spanish government and presented
to Parliament on Tuesday
have drawn heavy criticism from
both the main opposition party,
the conservative PP, and the leftwing
Izquierda Union.
The general value added tax
(IVA) rate, currently at 16 per
cent, is due to rise to 18 per cent
on July 1st next year, and one of
the two reduced rates will go up
by one per cent to eight per cent.
This second rate affects the price
of goods such as contact lenses
and glasses, accommodation and
funeral services.
The Government has promised
not to increase the third, lowest
rate of four per cent which affects
the price of basic goods such as
bread, milk, medicine, books and
newspapers.
This package of tax increases
along with the elimination of the
400-euro income tax deduction and
the increase in the taxation of savings
(those who gain more than
6,000 euros a year will be subject
CONTROVERSY. SALGADO HAS DEFENDED THE ANNOUNCED MEASURES. EFE
to a new tax rate of 21 per cent instead
of 18 from January 1st 2010),
are expected to bring in an additional
11billion euros in revenue,
combined with a 3.9 per cent cut
in spending.
Spain’s Economy Minister,
Elena Salgado, explained that the
measures would not come into effect
until July next year which is
when the Government predicts
that the economy will start to recover.
Salgado also defended the
tax increases by saying that those
who have the most should “make
the biggest contribution”.
Nevertheless, the initial reaction
for the government’s plans
has been less than encouraging.
Business leaders and the PP party
Investment in Malaga
continues but no funds
for new projects
The airport, the AVE line to Granada
andtheouterringroadgetthemost
SUR
Despite the finanical crisis the Government
plans to maintain its
spending patterns in the province
of Malaga. In the budget bill for
2010, presented by Minister Elena
Salgado on Tuesday, central Government
spending in the province
of Malaga has been set at 1.62 billion
euros, around 4.9% less than
last year. Nevertheless, Malaga has
the fourth highest input from state
funds, after Barcelona, Valencia
and Madrid. This means that investment
in Malaga is 32% above
national average.
All of the funds, however, are des-
say VAT hikes will further dampen
consumption and hurt competitiveness,
while unions and the left
say the increases would unfairly
burden the poor, workers and the
middle class.
Spending
In general the budget bill calls for
total spending of 185.25 billion
euros and forecasts revenues of
121.63 billion euros, resulting in a
deficit equal to 5.4 per cent of
Spain’s gross domestic product.
Deputy Prime Minister Elena
Salgado, who holds the economy
portfolio, said the government
has drafted an austerity budget
and that the plan would curb the
deficit while laying the basis for
recovery.
This is the first budget prepared
by Salgado, who succeeded Pedro
Solbes as economy minister in
April.
The austerity measures include
freezing the budget of the Spanish
royal family at this year’s level
of 8.9 million euros, while salaries
for Zapatero and other top officials
will remain what they were in
2008.
The government slashed resources
for an immigrant aid fund
by 50 per cent, to 100 million euros.
Because the Socialists are seven
seats short of a majority in the
350-member lower house and can
expect no help from the conservative
Popular Party, the administration
will need support from
smaller groupings to get its budget
approved.
PP leader Mariano Rajoy said
the government’s bill will result
in “more unemployment, more
deficit and more taxes”, and accused
Zapatero of “deceiving the
people” with his move to boost
taxes after having promised not to
during his re-election campaign
last year.
In previous years, Zapatero
could rely on votes from the
Basque Nationalist Party to pass
his budget, but that equation may
have changed since the Socialists
teamed up with the PP earlier this
year to form a non-nationalist government
in the Basque region.
The United Left coalition, which
often backs the Socialist government,
greeted the budget bill with
criticism, saying that the administration
should increase income
taxes on the wealthy instead of
boosting IVA rates.
MALAGA. THE AIRPORT RECEIVES THE BIGGEST PORTION OF FUNDS. S. SALAS
Foreign aid
Spanish foreign
aid budget
escapescutsin
new bill
EFE
Foreign aid is one of the
few areas not subject to cuts
in the austerity budget
Spain’s Socialist government
submitted to Parliament
on Tuesday.
Spain will devote 0.5 per
cent of the nation’s gross
domestic product to foreign
assistance in 2010, consistent
with Prime Minister
José Luis Rodriguez Zapatero’s
goal of boosting foreign
aid to 0.7 per cent of
GDP by 2012.
The amount allocated for
development aid stands at
4.2 billion euros, but totals
5.1 billion euros if the predicted
debt forgiveness and
other contributions are included.
Foreign aid rose from 0.2
per cent of GDP in 2004 -
when Zapatero took office -
to 0.5 per cent this year, and
the Spanish government intends
to raise it to 0.7 per
cent of GDP by the end of
the current administration,
scheduled for 2012.
Within the realm of multilateral
cooperation, the
amount allotted for food security
and the fight against
hunger - with special attention
to child malnutrition -
stands out in the 2010
budget.
THE MINISTER SHOWS THE 2010
BUDGET. EFE
tined for projects that are already
up and running, leaving nothing
for new schemes.
The largest portion of the budget
for Malaga goes to the ongoing airport
expansion scheme which will
receive 339 million euros, most of
which goes towards the second runway
and the completion of the new
terminal building.
Another 169 million euros will
go to the high speed railway line between
Bobadilla and Granada while
the most significant sums designated
for roads will go towards the
construciton of the second Malaga
ring road, the San Pedro underpass
and the airport’s new access road.
Other projects budgeted for include
the Malaga concert hall, the
new prison in the municipality of
Archidona, the Mijas-Fuengirola
desalination plant, and the city’s
fine arts museum, among others.