A fiscal consolidation plan, with public spending control measures; a strategy to improve the efficiency of administrations; and the generation of an adequate business climate with structural reforms. These are the duties that a group of experts convened by Fedea and the General Council of Economists have placed on the Government in preparing the next Budgets.
“Public spending has essentially grown in social spending and investment, productive spending, has not increased to take care of private investment. To this we must add the brutal spending that we expect in pensions for the retirement of the baby boom. For this reason, there is no margin,” a group of economic experts warned today in the session “Budgets, debt, deficit and consequences.” Participating in it were Valentín Pich, president of the Council, Salvador Guillermo, director of Studies and Economics at Foment del Treball Nacional, Ángel de la Fuente, executive director of Fedea, and José Emilio Boscá, professor of Fundamentals of Economic Analysis at the University of Valencia and associate researcher of the foundation.
One of the problems that economists have warned about is the growing spending on pensions. “The aging of the population threatens to unbalance future Social Security accounts even more and forces us to review the situation of our structural deficit,” Pich warned. The Airef has been focusing on this situation for some time and demanding reforms to curb spending. De la Fuente has taken a position along the same lines, and has also called for a tax reform focused “on the expansion of tax bases”, the fight against fraud and environmental taxation.
“Fiscal consolidation should be carried out with measures on public income and expenses that do not damage the productive fabric, while carrying out structural reforms and improving the efficiency of public administrations that allow increasing the potential growth of the economy.” ”, the speakers concluded.
“It is very important not to damage productive public investment and incentives for private investment, and to accompany the consolidation of structural reforms that stimulate long-term growth. To this end, the announcement by the Government of a medium-term consolidation plan that is credible and convincing is crucial to avoid lurches that generate problems of expectations and credibility,” he added.
Salvador Guillermo, from Foment, has focused on taxes on energy companies and banks. Two levies, he said, “that were sustained in a crisis situation and temporarily, for two years,” but that will continue. He does not share that permanence.
Asked if Spain has room to increase public revenue, one of the conclusions, expressed by Boscá, is that it does, but, “as a prior step to further increasing the fiscal pressure, it is necessary to improve the efficiency of the public sector, also for the spending side, to avoid distortions and disincentives on private sector decisions that the inefficient tax structure in Spain is causing.” For Salvador, “it is not about making those who already pay pay more, who do so prominently, but about making those who do not pay or do not pay what they are entitled to pay, and putting emphasis on the fight against fraud.” fiscal”. “We do not have low taxation,” he concluded.
Boscá has pointed out that, in his opinion, it is “essential to reduce current spending per capita and rethink social spending to gain space for public investment, educational spending and other expenses that help solve some of the problems that plague the older generations.” youths”. And he added that, “in the medium term, a reform of public administration could help reduce costs.”
