The coalition government approved this Saturday a new royal decree to deal with the consequences of the crisis arising from the war in Ukraine. PSOE and United We Can, after intense negotiations, have extended the measures promoted at the end of March and have included new proposals, such as the reduction of transport passes or the reduction of VAT on electricity from 10% to 5%. Total, Pedro Sanchez announced that it will involve a plan of more than 9,000 million euros and that they expect it to contain inflation at 3.5 points.
The Government has launched a direct aid of 200 euros for low-income self-employed, employed and unemployed people that can be requested from July and will be received in a single payment. It is intended for those households in which the sum of the income received by the cohabitants is less than 14,000 euros in 2021 and whose assets, discounting the habitual residence, does not exceed 43,196.4 euros. The Executive calculates that it will benefit 2.7 million people and will have a budgetary impact of 540 million euros. Those who already receive the minimum vital income or a pension will not be able to access this check.
Reduction of transport subscriptions
The government has approved a 50% reduction in subscriptions of transport provided by the State and 30% of all those titles that are managed by the communities and the town halls. In both cases, it will be covered by state resources. Even so, the autonomies and local entities will be able to complete the reduction up to 50% in the transport passes that depend on them. This measure, which will come into effective September 1 and will run until December 31, will cost 221 million euros.
Sánchez explained that, for example, the monthly bonus of Closeness in Madrid, which costs 28.9 euros, will cost 14.45 euros. In the case of Catalonia, the monthly ticket would go from 25.55 euros to 12.77 euros. And in Sevillefrom 34.70 to 17.35 euros.
The royal decree approved by the Council of Ministers includes a reduction of VAT on electricity from 10% to 5% which will begin to apply on July 1. This discount will mean a saving of about 2.7 euros for an average consumer with a monthly bill of around 60 euros and, according to the Government, it will affect 27.7 million households, freelancers and companies. In addition, the Executive extends the rreduction of the special electricity tax from 5.11% to 0.5%, the legal minimum, and the suspension of the special generation tax, which was levied at 7%. All this fiscal package will suppose a reduction in the income of the State of 3,600 million euros.
Tax on large electricity companies
The two parties that make up the coalition government will register a bill in Congress in the coming weeks to create un new tax that levies “the extraordinary profits of energy companies”. The intention of the coalition Executive is that this new tax between effective January 1, 2023, moment from which it will be required, although it will affect the 2022 financial year. However, Sánchez has not revealed what the design of this tax will be, although he has pointed out that they are “looking” at the example of Italy, where a tax has been approved extraordinary and punctual 25% to the benefits.
20 cent discount on gasoline
One of the measures that is extended from the previous royal decree is the bonus of 20 cents per liter of gasoline or diesel that began to work on April 1. The Executive has extended this reduction until December 31 of this year and it is estimated at €4.03 billion.
Revalue non-contributory pensions
The Executive has approved revalue non-contributory retirement and disability pensions by 15%, as they agreed with EH Bildu in exchange for the Aberzale formation abstaining from the pension reform. This will mean an increase in 60 euros per month, 360 euros until the end of the year. In addition, it also extends the temporary increase of 15% of the minimum vital income. The Government anticipates that the income of more than 800,000 vulnerable households will be strengthened in this way.
Limit the price of butane
Another of the new measures that have been introduced in the royal decree is the freezing of the price of the butane cylinder until the end of the year at 19.55 euros. This initiative was already launched by the Government during the first confinement due to the coronavirus pandemic.
Limit to the rental price
Four months ago, the Government limited increases in rental prices at 2%. The Executive separated the updating of the IPC contracts, due to high inflation, and related it to the Competitiveness Guarantee Index, which was at 2%. In this way, increases greater than that figure are prevented, unless there is an agreement between lessor and lessee to make a greater increase.
The ban on cutting off electricity supply to vulnerable consumers also remains in force. Along the same lines, the suspension of evictions and evictions from the habitual residence for families in vulnerable situations is extended until December 31.
Extension of the electricity social bonus
The Executive extends the electricity social bonus, which is a discount on the electricity bill for the most vulnerable households. Last March, the Government reinforced this measure, expanding its coverage by 600,000 new families, reaching a total of 1.9 million beneficiary households.