Dec. 13 (Bloomberg) -- Italian Prime Minister Mario Monti’s government proposed changes to pension cuts and a new property tax in its emergency budget package as it tries to build support in parliament for a plan to trim the euro-region’s second- biggest debt.
The plan will be amended to raise the threshold on pensions that will be stripped of cost-of-living increases to 1,500 euros ($1,960) a month in 2012, from less than the 1,000 in the original plan, according to a copy of the amendment. A new property tax on primary residence will be lowered for families by 50 euros per child, the amendment says.
The government will cover the lost revenue from the changes by increasing the planned levy on Italians who took advantage of previous amnesties on tax evasion and raising a new tax on checking accounts that have a monthly balance of more than 5,000 euros.
Monti, in office less than a month, proposed the 30 billion euro package of austerity and growth measures as he tries to convince investors he can bring down borrowing costs and tame a debt that is bigger than Spain, Greece, Portugal and Ireland combined. The premier, who was appointed after Silvio Berlusconi resigned, has no base in the legislature and needs to gain support from parties across the political spectrum.
The original plan would have stripped pensions of twice the minimum payout of cost of living adjustments for the next two years. The new threshold is about three times the minimum. The package also reinstates the main property tax that was abolished by Berlusconi.
Today’s amendment will also add a tax surcharge on pensions of more than 200,000 euros a year and will impose a levy on property owned by Italians outside of Italy.
The Chamber of Deputies is due to vote on the budget package this week, with debate in the Senate due to begin on Dec. 21 with a vote in the upper house by Dec. 23.
--Editors: Andrew Davis, Kevin Costelloe.
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