BUSINESS

New measures to hurt lowest incomes most

THANOS TSIROS

TAGS: Finance, Taxation

The government has chosen to implement a tough policy that mainly harms the weakest economic classes in its effort to achieve the necessary primary budget surplus of 3.5 percent of gross domestic product for the period from 2018 to 2021.

The approval of the new package of measures will sink social benefits. The EKAS allowance for low-income pensioners will disappear. The increase in tax revenues will mainly come from the reduction of the tax discount that directly hurts those on lower incomes. There will be no one-off financial support such as that distributed in 2014 and last year, at least up to 2021. And the budget for the minimum guaranteed income is set to remain unchanged until at least the start of the next decade. There will also be a reduction in the budget of the National Organization for Healthcare Services (EOPYY), and the only significant raise will be in the state sector’s salary expenditure.

Consequently this will be the first time since the country joined the bailout mechanism in 2010 that the greatest burden will fall on the shoulders of low-income workers and pensioners – i.e. those who are already close to the poverty line.

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