SecondIn the new Child welfare The aim is to increase the birth rate in Italy and reduce family costs. The Italian government has now launched a legislative decree that provides for the provision of income-related state subsidies to all Italians. The new child benefit aims to replace various other grants, thus making the system simpler but also more generous. According to the government’s plan, new aid will cost 15 billion euros in the coming year, and expenditures will climb to 19 billion euros by 2029. The Minister of the Family Elene Bonetti called the decision historic: “This has increased the public expenditure of the family by 50%.”
Italy has the world’s second-oldest population after Japan, and has so far spent relatively little to support the family. According to Eurostat, it only accounted for 1.8% of GDP in 2017, compared with the EU average of 2.3% and Germany’s 3.3%.
The Italian Ministry of Finance talked about the increase in control costs, because at the same time the existing family and child benefits will be reduced or merged. The ministry emphasized that the bottom line is that the increase in expenditure is only 6 billion euros. This additional expenditure will hardly change the existing financial planning. They will be mainly funded by savings already taken into account, and a small part will be funded by deficits.
It said it would not use funds from the EU reconstruction plan. According to the latest news, Italy expects the new government debt to account for 8.9% of GDP this year, and it is expected to fall to 5.6% in 2022. According to the current plan, Italy hopes to achieve a deficit of 3.3% in 2024. The government announced that this year’s total national debt will account for about 155% of GDP.
610 euros for three children
The new child welfare is widely supported in the government’s multi-party coalition. The increase in donations and the simplification of plans are welcomed. Unlike Germany, the allowance is based on the amount of income. The family’s annual income does not exceed 15,000 Euros, the maximum of 175 Euros per month for the first child, and the maximum of 610 Euros per month for three children. On the other hand, the family income exceeds 40,000 Euros and the first child only has 50 Euros. In the upcoming parliamentary deliberations, the details are still subject to change. The right-wing populist coalition party wants to ensure that only citizens who have been in Italy for ten years are eligible—not the two years stipulated in the draft.
However, there are also warnings in Italy. Veronica De Romanis, an economist from the University of Louise in Italy, sees that child welfare will only increase public spending without the danger of any fundamental changes. Given the high national debt, Italy cannot afford it. “In the past, subsidies have increased, but the birth rate has fallen,” she told FAZ. It is more important to increase incentives to increase the employment rate of women to ensure work-life balance, that is, increase the number of kindergarten places first.
