Here are the flaws in the Ristori decree. Report
What the Senate Budget Service technicians say about the Refreshments decrees
While the government is hypothesizing a Ristori Ter decree, the technicians of the Senate Budget Service have studied the first two measures.
Here are criticisms, things to clarify and the limits of the decrees, according to the technicians.
CLARIFY COVERAGE: FROM SAVINGS OR NEW ESTIMATES?
Let's start with what should be clarified, according to officials in the Senate Budget Service. "It seems useful to clarify" whether the offsetting of the effects of the refreshment decrees (which determine an overall negative balance of 4,974.9 million in 2020), "is entirely based on savings deriving from measures (brought about by the so-called 'Covid-19 decrees' and financed with the resources indicated in the Reports to Parliament referring to the first three budget variances) or partly also to rely on the more general improvement of the public finance framework for the current year that emerges in the Dpb 2021 compared to the Nadef 2021 ", they write the technicians of the Senate Budget Service in the dossier on the two measures, as reported by the Sole 24 Ore Radiocor.
NET DEBT OF 5 BILLION
The technicians also do some math: the cumulative effects of the two 'refreshment' decrees determine for 2020, a worsening of the balances equal to about 3.7 billion in terms of requirements and 5 billion in terms of net debt ".
These effects find, explain the technicians, compensation in the "improvement of 0.3 percentage points of GDP, equal to about 5 billion, which corresponds to the difference between the deficit / GDP value indicated by Nadef 2020 of 10.8% and the subsequent value in improvement of 10.5% contained in the Draft Budgetary Document for 2021 ", reports Radiocor , adding that" there is a worsening of the trend forecasts compared to the last estimate contained in the Dpb for 2021 ".
MONEY REMAINING FROM THE ACTIONS TAKEN
Entering into the specifics of costs and measures, the technicians argue that "the technical report attached to the first 'restorations' decree (Legislative Decree 137/2020) specifies that the provision, remaining within the debt limits authorized for 2020, makes use of the which became available following the lower use of some measures established by the measures adopted in May and August, 'in particular with regard to various tax credits, including those relating to deferred tax assets (Dta), to lease payments of non-residential properties, the purchase of low-emission vehicles, the bonus for workers present in the company in March ". The 3 billion 'saved' by wage integration measures also contribute to the measures.
Not only that: "The amount of 730 million relating to Dta appears to be among these savings".
THE SAVINGS ITEMS
And for the savings item, say the technicians, "it would be useful to know the amounts relating to the additional savings and / or higher income items mentioned in the technical report, specifying whether these positive effects have already been incorporated into the Nadef forecasts or fall within the 2 billions of estimated savings (in addition to the 3 billion for wage integration measures) from Dpb 2021 ”.
LOWER REVENUE, HIGHER EXPENSES
The measures, the technicians still explain, as reported by Radiocor , “bring lower revenues and higher expenses (loans or interventions) for approximately 7.8 billion in 2020, 2.1 billion in 2021 and 0.4 billion in 2022. A in the face of these uses, resources (or hedges), in terms of higher revenues and cost savings, total approximately 2.9 billion in 2020, 2.1 billion in 2021 and 0.4 billion in 2022 ".
This would therefore lead to a worsening of the deficit for about 5 billion, while "in 2021 there is an improvement of 7.8 billion".
INTERVENTIONS, COVERINGS AND EXPENSES
Looking at the interventions, “in 2020 the higher expenses prevail, reaching the amount of approximately 6 billion, almost entirely attributable to the current portion (5.9 billion), against lower revenues of approximately 1.9 billion. Also in 2021 there was a prevalence of higher expenses (1.7 billion all referable to the current part) compared to lower revenues (about 0.4 billion). In 2022, the loans recorded higher current expenses 0.1 billion and lower revenues of approximately 0.3 billion ".
The 'internal' coverage of the two measures "in 2020 are almost entirely attributable to savings in current expenditure (approximately 2.8 billion) while in 2021 higher revenues prevail (approximately 1.8 billion) compared to savings in current expenditure for 0, About 3 billion. In 2022, resources are represented entirely by cost savings (0.4 billion, of which about 0.3 is current account) ".
The net spending maneuver would lead to an "increase in disbursements of approximately 3.2 billion in 2020 and 1.4 billion in 2021. In 2022, on the other hand, there was a net reduction in expenditure of approximately 0.3 billion, which offsets the net reduction for the same amount of revenue ".
DOUBTS OF CONSTITUTIONALITY
Numbers, expenses and accounts aside, however, what stands out most to the eye are the doubts of constitutionality. The Senate Budget Service experts argue that Article 8 of the Restorer Decree bis which refers to ordinances of the Ministry of Health for the classification and updating of the areas most affected by the Covid emergency could raise doubts of constitutionality.
Let's try to explain: for the charges deriving from the extension to those areas of the aid measures provided for by the decree (non-repayable contributions, suspension of tax and social security payments, parental leave, baby-sitting bonus) there is a spending ceiling of 340 million for 2020 and 70 million for 2021. These charges, however, would not be “characterized by modulation by establishing benefits based on fixed parameters”.
"The extension of these interventions for subsequent orders of the Ministry of Health aimed at extending the high-risk areas to other regions or territorial areas, within the limits of the fund in question," explained the technicians in the dossier, adding that "the criterion with which the spending limit will be enforced if, for example, accepting the applications on a chronological basis (the alternative of re-proportioning the amount of benefits based on the number of applications does not seem feasible since, as mentioned, the benefits are not modular) " .
The problems of constitutionality would derive from the failure to comply with the principle of equality: for "the Regions identified with the ordinance of November 4, 2020 there are no spending limits, while for the Regions identified later the article in question provides for a spending limit that could determine a minor benefit or distributed only to a part of the entitled persons. The risk of litigation for unreasonable violation of the constitutional canon of equality appears high, with the possible consequent financial repercussions ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutte-le-magagne-nel-decreto-ristori/ on Wed, 18 Nov 2020 06:35:11 +0000.