2012 Euskadiko Arrekontu Nazional

2012 (2012) Euskadiko Arrekontu Nazional
Euskadi National Budget

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File:EAN2012.png 2012 Euskadiko Arrekontu Nazional cover
Submitted	2011, october 18th
Submitted to	Eusko Legebiltzarra
Parliament	Eusko Legebiltzarra
Treasurer	Xabier Markina Urkullu
Total revenue	$ 327.144 billions
Total expenditures	$ 325.787 billions
Debt payment	$ 1.957 billions
Surplus	$ 1.357 billions
Website	[1]

The 2012 Euskadiko Arrekontu Nazional was delivered by Xabier Markina Urkullu, the Ogasun-Sailburu (Minister of Finance) to the Eusko Legebiltzarra on Tuesday 18th May 2011.

The budget is framed in the current european financial crisis scenary, and is oriented to the restoration of public finances. The package of measures to restore public finances consists of:

• public spending cuts;
• reversal of personal contributions for health care;
• increased tax and social insurance contributions;
• investments to make society safer, strengthen the economy and improve the quality of life.

Budgetary policy 2010-2015

Need for measures

The global financial and economic crisis that commenced in 2008 has hit Euskadi and public finances have deteriorated badly. To overcome the crisis and cushion the worst blows, the economy is being stimulated to keep people in work and investments are being made in business. Public spending has accordingly increased but tax revenue has fallen sharply.

The crisis has led to a serious budget deficit and a sharp jump in the national debt. The gap in public finances will not go away by itself. The public debt will continue to rise as long as there is a budget deficit, as will the interest the government has to pay on the debt every year. Public finances in Euskadi will be untenable without drastic measures. Furthermore, without robust public finances Euskadi will lose the confidence of the financial markets.

Urgent measures are also necessary in view of the ageing population. People are living and drawing their pensions for longer and making more use of care services. Care costs are also rising every year, as are the care contributions. For these social services to remain affordable and accessible, public spending must be cut and the budget deficit must be eliminated in the years ahead to prevent the debt from rising further.

The budget deficit must therefore be addressed and public spending must be cut. To restore public finances, the government has proposed a package of cuts totalling $ 24.58 billion.

Spending cuts

• $ 9.7 billion in the government sector.

The biggest cuts will be achieved by making government smaller and more efficient. There will be fewer civil servants and tiers of government, with fewer tasks and rules.

• $ 1.9 billion in government grants.

Fewer grants will be available for culture, minorities, political parties and trade unions for instance.

• $ 2.5 billion in international expenditure.

The government wants to contribute less to the UN and the international aid will be cut. Defence and development cooperation spending will also be limited. The number of embassies and consulates abroad will be cut.

• $ 4.3 billion in healthcare costs.

Certain treatments will be removed from the standard healthcare package and transferred to supplementary care insurance schemes.

• $ 0.9 billion in government contributions

The contribution to childcare costs will be limited. The costs have risen by $ 2 billion in four years. Students who take longer to complete their courses will also pay higher fees.

• $ 5.28 billion in labour market and benefit costs.

The state pension age will be raised to 67 on 1 January 2016. The government will also punish benefit fraud more severely.

Investments

The Eusko Jaurlaritza will not only reduce spending and increase taxes. Between now and 2015 it will also invest $ 9.01 billion in, for example:

• care ($ 1.37 billion);
• security (1.12 billion);
• immigration and integration ($ 0.12 million);
• infrastructure ($ 2.64 billion);
• education ($ 1.33 billion);
• innovation ($ 2.43 billion).

2012 Budget

Revenues

Central government revenue consists of:

• taxes (main source of revenue);
• social security and insurance contributions;
• oil & natural gas revenue;
• income/profits from state holdings in private enterprises;
• national lotery;
• fines.

Item	Revenue ($ billions)
Tax Income	$ 211.778
Total direct taxes	$ 90.375
Individual income tax	$ 47.780
Corporate income tax	$ 34.115
Dividend tax	$ 4.190
Inheritance and gift tax	$ 2.950
Other direct taxes	$ 1.340
Total indirect taxes	$ 121.403
VAT	$ 76.490
Excise duties	$ 19.210
Environmental taxes and levies	$ 5.470
Taxes on legal transactions	$ 4.940
Motor vehicle tax	$ 4.410
Import duties	$ 3.750
Oil powered vehicles tax	$ 3.080
Tax on packaging materials	$ 2.260
Tax on consumption of alcoholic drinks and tobacco	$ 1.300
Other indirect taxes	$ 0.493
Social Security Contributions	$ 43.700
Employees' Insurance Contribution	$ 51.200
Oil & Gas Revenues	$ 13.900
Profits from state holdings	$ 1.789
National Lottery Benefits	$ 2.228
Fines	$ 0.874
Other Extraordinary Incomes	$ 1.675
Sell of state assets	$ 0.910
Sell of state shares in private companies	$ 0.765
TOTAL BUDGET REVENUES	$ 327.144

Expenditures

Item	Expenditure ($ billions)
Social Security	$ 41.880
Labour Market	$ 23.120
Care (Public Health)	$ 67.670
Interest Charges (Debt)	$ 11.800
Debt Repayment	$ 3.140
Ministries Expenditure	$ 178.177
Education culture and science	$ 47.410
Defense	$ 43.940
Municipal and regional fund	$ 27.470
Transport, Public Works and Watermanagement	$ 17.350
Foreign affairs / development cooperation	$ 14.250
Youth and families	$ 6.880
Internal affairs and relations	$ 6.130
Justice	$ 5.380
Housing, communities and integration	$ 3.100
Agriculture, Nature and Food Quality	$ 2.790
Economic affairs	$ 2.240
Finance	$ 1.970
Spatial planning and the enviroment	$ 1.520
Other	$
TOTAL BUDGET EXPENDITURES	$ 325.787