The successive measures that the Government has been applying to counteract the effects of the escalation in prices have managed to moderate inflation that peaked last July, close to 11%, up to the current levels of 5.9% in January. They have also helped households bear such an extra cost, but from the outset both the Bank of Spain and numerous economists have criticized the general nature of many of these measures, so that by benefiting everyone they end up having a regressive nature Apart from being extremely expensive.
This Wednesday the Bank of Spain insisted on this idea. He stressed that only between 15% and 20% of anti-crisis measures have been specifically aimed at the vulnerable. They are initiatives such as the reduction of personal income tax, transfers to households based on their income and wealth and the specific increase in non-contributory pensions and the minimum vital income. On the other hand, the rest, between 80% and 85% of the final cost, corresponds to measures of general scope. This is the case of the VAT reduction on electricity and gas, food and fuel bonuses; the latter measure abolished this year.
In the Bank of Spain article, signed by Esteban García-Miralles, differences are also established between the generalist measures. It is worth noting, for example, that the savings in fuel benefited the highest incomes the most, while the VAT reductions for electricity, gas and food would have meant relatively greater savings for low-income households.
The Bank of Spain calculates that the Government has committed a total of between 34,000 and 40,000 million euros in anti-crisis measures for the period 2021-2025, with a greater concentration in the years 2022 and 2023.
Based on this analysis, what he proposes is to modify aid and focus it on the most vulnerable. Concentrating them on lower-income households would allow levels of protection similar to those achieved with the measures already implemented, but with less of a hole in the budget.
Already last week, Ángel Gavilán, general director of Economy and Statistics of the Bank of Spain, proposed replacing the fuel bonus (already eliminated) and the VAT reductions for electricity, gas and food with a punctual transfer of income of 860 euros focused on the 30% of households with the lowest income.
It is estimated that in this way, protection would be maintained for practically all vulnerable households with lower budgetary costs. To be precise, the number of vulnerable households would be reduced to less than 4%, and the budget savings would be 4,790 million.
