Government blames PPP for the debacle. corrected expense does not fall and government to provide 10% cut in investments in 2016
The public expenditure on intermediate consumption item associated with the so-called State of fat, will increase 8.6%, or 912 million euros in 2016, amounting to 11.5 billion, according to the draft state budget.
It is the largest increase since 2009 and its share in gross domestic product equals that year ( 6.2%), a historical record. The intermediate consumption (purchase of goods and contracting services) is worth 13% of total expenditure; before the troika was worth 10.7%.
The Finance blame the burden of public-private partnerships (PPP) for what happened and promise savings in this area and more efficient public services in general. But accept that there is fat in the amount of at least 499 million that can be burned by “measures” which never specify (316 million in intermediate consumption and 183 million in “sectoral savings and administrative simplification process”).
it is, in fact, what they have done all governments in the recent past. Since 2010 intentions are announced of “rationalization”, “optimization” and “cost control” to fight “waste” in the public machine. The PSD-CDS government, for example, announced to the intention to reduce spending on studies, opinions and consultations.
The budget this year is particularly marked by the increase in revenue (for which contributes the rise of some taxes and the prediction of improvement in the economy) and the question of spending was a little into the background. Or, as the European Commission, certain measures on the spending side “are not detailed enough.” The ministry of Mario Centeno speaks of an OE “different”, but admits that the deficit falls only by means of revenue.
The goal for the 2016 deficit “stands at 2.2% GDP, 0.9 percentage points below the estimate for 2015, excluding the impact of Banif resolution. ” Just taking the effect of the Madeiran bank rescue is that realizes the consolidation effort inherent in the public system. interest because they are a permanent legacy of colossal public debt Included.
So, starting from an adjusted deficit of 3.1% (without Banif), the Finance find that the purpose of the reduction “in 1412 million (0.8 pp of GDP) compared to 2015 results from an increase in revenue by 1.8 percentage points of GDP, higher than the increase of expenditure “, which is worth one point of GDP. “Best practices” of Europe ask the preponderance of spending. This should be worth two-thirds of the adjustment. It’s not what happens.
Spending “is expected to increase 2.3% (excluding Banif), largely explained by the growth of staff costs and benefits, which reflect the effect of policy measures “the gradual rollback of wages and” replacement of minimum social standards in certain benefits. “
the food expenditures are intermediate consumption, which punctuate fats. It is the item with the second highest increase in the expenditure mix, “mainly influenced by the costs of PPP and road sub-concessions”.
The government promises that this jump “will be partially offset by expenditure restraint in purchasing goods and services, in particular in the various ministries, but also at the level of regional and local government. “
the expense item that rises more are subsidies (25.5%). Will be connected to more support for vocational training (+ 126%), transport enterprises and the rural sector and fisheries
Only one item is falling:. Spending on capital, which is the investment public. In adjusted terms (without the injection Banif), the breakdown is 10% (to 4.5 billion).
The Socialists accused Passos Coelho had made “propaganda” with the savings in the PPP and It says the situation is being reassessed. This year, the PS team sees total net charges of 1.69 billion euros; Steps the executive via 1.58 billion.