The government submitted Greece’s 2019 budget – the first in the post bailout era – to Parliament on Wednesday, saying it seeks to redress injustices against weaker social strata.
Moreover, Alternate Finance Minister Giorgos Houliarakis told lawmakers that it does not include legislated pension cuts planned for January.
“This is the first budget since 2008 which includes a very clear fiscal expansion of about 0.5 percent (910 million euros) of gross domestic output... a first crucial step in changing the fiscal policy mix,” Houliarakis said.
The government’s purported emphasis on poorer sections of society and its narrative of better days to come is seen as part of its bid to set the agenda of the public debate ahead of national elections next year.
To this end, government sources said on Wednesday that the primary budget surplus may overshoot the 3.5 percent target and even reach 3.98 percent, which would provide additional fiscal space to help “relieve” poorer sections of society.
Describing the budget, government spokesman Dimitris Tzanakopoulos echoed Houliarakis’s sentiment with regard to a new fiscal policy mix for 2019 laced with relief measures.
Among other measures, Tzanakopoulos referred to a gradual reduction in the highly unpopular ENFIA property tax, as well as in the corporate tax – from 29 to 25 percent by a yearly reduction of 1 percent.
He also highlighted reductions in the social insurance contributions of self-employed professionals and farmers.
However, opposition lawmakers blasted the government for the commitments it has made to its European Union partners that will bind the country in the coming years and which essentially entail a new program of harsh measures.
Describing the budget as the government’s “swan song,” New Democracy’s shadow finance minister Christos Staikouras said the high budget surplus targets can only be met through the overtaxation of businesses and households and property confiscations.
“The government is celebrating because it will reduce several taxes, when it has in fact imposed 29 new taxes,” he said, adding that it has not implemented the so-called countermeasures it had championed and that it has basically “knocked down” the Public Investment Program.
He said the budget fails to tackle fundamental problems such as Greece’s inability to tap international markets and the mounting tax and social insurance burdens of citizens and the high level of the state’s arrears.