The negotiation phase of the Budgets has started on Monday with the PSOE with a major event in which Vice President Yolanda Díaz has identified housing, social rights, and taxation as main axes. The 36-page document prepared by experts from the five ministries of the political group includes some innovative proposals, such as conditioning public housing assistance to the autonomous communities on the implementation of the law to limit rental prices. Additionally, Sumar proposes the temporary ban on the purchase of properties for speculation in high-pressure areas, meaning these properties can only be used for primary residence or affordable rental. They also suggest making indefinite contracts the default for rental housing and ending illegal tourist rentals. They also propose a fiscal package that would contribute 27,000 million euros to public coffers.
During her speech, Díaz highlighted the “pending tasks” of reducing inequality and modernizing the country. She emphasized the need for measures that improve the lives of working families in Spain and urged the socialists not to give up despite the challenges the Budgets will face in the parliamentary process. Díaz stressed that Spain needs to move forward and transform, as the coalition’s supporters want them to, indicating a desire for progress.
The minority partner of the government made an effort to present a united front. The Minister of Labor was joined by her four ministers and the parties of the parliamentary group to demonstrate strength before the negotiations with the socialists. The representatives from Sumar, including the Minister Urtasun and the Secretary of State for Employment, are responsible for meeting with the PSOE delegation.
The other two pillars of the presented document focus on reconciliation and taxation. Regarding reconciliation, the leftist coalition advocates for a universal childcare benefit of 200 euros until the age of 18, the universalization of education for 0-3 year-olds, extended maternity leave to 20 weeks, immediate implementation of a paid parental care leave (at least four out of eight weeks), and more healthcare benefits like dental care and direct aid for glasses and contact lenses. The document also addresses areas like strengthening the budget for the reception and protection of minor migrants, particularly in regions with high pressure such as the Canary Islands and Ceuta.
To finance these measures and increase public resources for welfare services, the minor partner proposes significant changes to personal income tax and corporate tax, two key taxes in the Spanish fiscal system. Regarding corporate tax, Sumar suggests eliminating exemptions that distort the effective rate and benefit large companies, limiting the compensation of losses or unapplied deductions to four years, eliminating group consolidation regime, and abolishing the deduction for double taxation of dividends repatriated from outside the EU. In terms of income tax, Sumar proposes raising the rates on investment earnings to gradually equalize them with labor income and introduce additional brackets for incomes over 200,000 euros.
In addition, Sumar suggests modifying the tax on large fortunes, adjusting it to target wealth over 1.7 million euros. They also propose creating a similar tax to counter regional tax breaks on inheritances over one million euros. Other proposed tax changes include redistributing VAT to include private education and health insurance, reducing it on basic products and services, removing tax privileges for the Catholic Church, and enhancing green taxation with levies on private planes, yachts, luxury cars, and other luxury items. The Budgets also aim to deepen the territorial rebalancing and commitment to update the regional financing system, ensuring provision of public services at the same level for underfunded territories or those with higher population dispersion.
