Portal de Murcia
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The House has agreed, with the votes of PP and IU, to urge the National Government to repeal the increase in VAT rates scheduled for July 2010.
According to expose the PP, the inability of the socialist government to the crisis has meant that more and more families lose purchasing power and increasing numbers of homes with great difficulty to make ends meet.
The Spanish Confederation of Housewives, Consumers and Users (CEACCU) estimates that, with this increase, the extra expenditure of each household will be € 354 annually.
For pensioners, the VAT increase will mean another blow to its limited economy and were the most affected, the council spokesman explained Nuria Fuentes, and a marriage with a benefit of 679 euros per month or a widow with a monthly pay of 587 euros will have to take extra spending 30 euros a month.
Moreover, the VAT hike decided by the Government of Argentina will cost 3 million euros for the municipality of Murcia.
To this must be added that the municipalities will have in 2010 with 24% less state funding, which translates into 17 million less for Murcia in this exercise.
Also, 68% rise in the price of water from the Tagus to supply affects the pockets of all Murcia.
The municipal People's Party group in the city of Murcia recalls that in 2009 government accounts have shown the greatest deterioration in their history.
The significant deviations in the estimated income and expenditure for 2009 show that the state has lost control of the economic and public finance.
The Government, far from addressing the correction of this grave situation of imbalance of our public finances through a process of fiscal consolidation based on control of public spending and austerity measures in the activities of all government, presented a State Budget for 2010 that not only provide for an increase of 17% of non-financial expenditure of the State with regard to PGE, 2009, it introduced the largest tax increases of democracy, with the burden of all the progressive correction of the deficit in a hypothetical increased revenues resulting from tax increases approved for 2010.
Both empirical evidence and numerous studies show that the rise in consumption taxes in an economic crisis such as that reflected their own budgets, is an unwise measure because, by its negative effects on consumption and therefore, investment and jobs, will hurt economic recovery not only have impact on revenue.
Besides the negative impact this increase will have on products and services such as clothing, footwear, household appliances, electric bill, phone bill, car, housing, food, hotels, restaurants, ground transportation ..., municipalities and regional government will drastically diminished their capacity to procure works and services, not counting the damage that the VAT hike will lead also to the projects contracted under the current State Fund for Employment and Local Support.
At this cut will be added to 3,000 million euros less than the Local Authorities no longer receive state transfers for this year.
With these data, the economic prospects of local governments and the instruments to tackle the serious financial situation will not only become worse, which envisions a bleak picture for the second half of this year.
But, still, the big losers will be doubly punished citizens themselves, in their difficult access to basic consumer goods and the quality of service delivery they receive from City Hall.
Source: Ayuntamiento de Murcia
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