Mr Monti, here’s what waste to cut

An alternative budget for Italy

The initiative by Mario Monti’s government to ask citizens to suggest cuts has produced predictable results.

The capitalist-owned mass media has been banging on about the ‘cost of politics’ for months and hey presto the vast majority of proposals posted on the dedicated government website from ordinary Italians have been about ‘waste’ by politicians, government officials and the public sector in general.

Reuters reports

• How can Italy cut its mammoth public spending? How about slashing the salaries of politicians and making them all travel on public transport? These are two common suggestions given by Italians on a website launched by Prime Minister Mario Monti last week to ask for tips on how to save 4.2 billion euros (3.4 billion pounds) before the end of the year. More than 95,000 messages – one every two seconds on average – have already been sent to the government site http://www.governo.it , Monti’s office said in a statement on Tuesday. It said the most common theme of complaints was the cost of Italian politics including the relatively high salaries of lawmakers, their generous pensions and other privileges such as the expensive “blue cars” they are driven around in.

In truth, the Monti government’s initiative is a cynical con trick to avoid a real and necessary debate about the real reasons for the economic and social collapse in the country.

Yes, the political class is generally corrupt and costs too much, but this is not the crux of Italy’s problems.

This lies elsewhere: in corporate greed, huge subsidies to the banks and big business, massive tax evasion and avoidance, and punishing austerity measures designed to roll back the state and hand over yet more public wealth to the rich.

But since the Government has asked for suggestions about waste and what cuts should be made, a campaign called Sbilanciamoci!, which publishes an alternative budget each year, sought to help him out with some very precise and sensible suggestions.

The following proposals, the campaign says, are ‘to avoid waste and to use government spending on boosting people’s rights, peace and the environment’.

Tax law and justice:

Wealth tax on assets The rich are not paying their way and the weight of the crisis is falling squarely on the shoulders of the poorest segments of the population. We therefore propose a tax of 5 per 1000 on capital assets of over €500,000, with some further progressivity built in, using data on property filed in tax returns. €10.5 billion for the Exchequer

Progressivity Our tax system has lost its truely progressive character in recent years. Progressive taxation not only ensures more resources for the Exchequer, but is also fairer. Sbilanciamoci! proposes a 45% rate for incomes above €70,000 and 49% for incomes over €200,000. In this way we could generate €1.2 billion paid for largely (77%) by taxpayers earning over €200,000 per year.

Financial products Today, interest on bank deposits are taxed at 27%, and interest on bonds, capital gains and returns of individual stocks and mutual funds at just 12.5%. The unification of financial income has long been one of the priorities of fiscal policy promoted by Sbilanciamoci! and would represent an important victory for tax justice in our country. You could move the taxation of all pensions to 23%, a threshold that still remains aligned with the major European countries and that therefore carries no risk of capital flight. In this way the Treasury could receive at least €2 billion.

Tax television rights for sports and entertainment. Like advertising, the sports-entertainment business distorts the market and diverts resources away from sport for the general population. It is therefore proposed to adopt the French method of taxation of television rights to fund sport for all and sports facilities for public use. A rate of 5% of total fees paid could raise around €40 million.

Taxing advertising Advertising in Italy is worth around €10 billion euros. In the era of large concentrations of media and advertising agencies, nobody can deny that this has distorting effect on consumption, lifestyles and competition. The proposal, therefore, is reduce the profits of the entire advertising sector by a 5% levy on profits, with the twin aims of cutting back on the intrusiveness of advertising and using the resources to devote to school and cultural activities for all. The expected revenue is about €500 million.

Vehicle tax on the emission of CO2 Current vehicle taxation is based on engine capacity and horsepower tax. We demand that taxation of vehicles is carried out in a progressive manner on the basis of CO2 emissions that affect progressively more powerful and environmentally inefficient vehicles (like SUVs or older registered vehicles). The increased revenue resulting from this alternative method of vehicle taxation amounts to €500 million.

Fiscal measures to penalize the production and (legal) trade in weapons We propose a surcharge of 4% on sales of the arms industry and an increase of €200 for the license of weapons of self-defence (there are now over 50,000 licenses). This would generate about € 270 million

Environment and Sustainable Development:

Reducing investment in large scale public works.  We call for the abandonment of the logic of the public works which are costly and are poorly implemented. Instead we should optimize existing infrastructure and its use (with the necessary modifications and upgrades). In particular, we propose the cancellation of the €1.5 billion allocated to public works in the 2012 Stability Law [budget].

Removal of funding to road cargo transport. We propose switching planned expenditure of €400 million  in favour of road haulage to more sustainable forms of transporting goods around the country (intermodality, linking motorways to sea ports, use of rail transport).

Disarm the economy, build peace:

Reduction of military expenditure We demand cuts of €3 billion in military spending. This could be achieved by downsizing the armed forces and integration – with economies of scale – within the framework of the European Union and the United Nations, providing of course this links our Armed Forces to authentic tasks of conflict prevention and peacekeeping rather than military interventionism.

Elimination and reduction of weapons programs (for F35 and beyond) The Italian government shouldn’t sign the contract for the production of 90 Joint Strike Fighter bombers. It should axe the funding for 2012 for the production of 4 FREMM submarines, the F35 fighter jets, two “Horizon” frigates. Expected savings: €783 million.

Military out of Italian cities We want an end to the presence in, and patrolling of our cities by armed forces personnel and demand that the funds saved (€72 million ) are used to pay overtime to public safety law enforcement personnel.

Withdrawal from Afghanistan We demand the withdrawal of Italian troops from Afghanistan and all the international missions that do not have a mandate from, and support of the United Nations. This measure would save €616 million

Celebrate June 2 Republic Day without a military parade We have calculated an average cost of the Military parade of about €10 million. This could be used to allow 1,700 youths carry out community service activities that are useful for communities, thus helping more than 10,000 people in need: the elderly, disabled, homeless, children.

Welfare, social rights and education:

Closing Cie (Centers for identification and expulsion) With €174 million provided in the budget for 2012 for the deployment, leasing and management of new Cie Italy could fund a national programme of social inclusion, including: public courses, free teaching of the Italian language, decent housing solutions for Roma, a national system of protection against racism, the school placement of children and young people of foreign origin, scholarships for young people of foreign origin, cross-cultural spaces and resources for young ‘children of immigration’

Abolition of funds to private schools  €700 million could be saved by the elimination of public subsidies to private schools and this could be used to revitalize the state school system, focusing on priority areas: the right to education, school buildings and the quality of education.

The adoption of free software by central and local governments This could bring very significant savings. It would save around €2 billion a year on license fees (of which €680 million for Microsoft solutions alone). The advantages are not only economic but boost administrative transparency and expenditure control.

These are just some of the recommendations developed in the 13th report Sbilanciamoci!: www.sbilanciamoci.org