Govt can fund basic citizen's income, pension reforms, flat tax - Conte

Govt can fund basic citizen's income, pension reforms, flat tax - Conte

Public funds are available to fund the populist government's flagship policies of a basic citizen's wage, cuts to the retirement age and a flat income tax, premier Giusepppe Conte said on Thursday, adding that the administration "did its sums a thousand times".

"There is sufficient money to fund the basic citizen's income, (revise the deeply unpopular 2011) Fornero (law that raised Italians' retirement age) and tax simplification," Conte said.

The government "did its sums a thousand times and saw it can enact these three measures," he claimed.

"They are reforms that don't belong to either political party...but are part of a contract signed by their two leaders," Conte said, referring to the populist government's Five-Star Movement and League party coalition partners.

Conte earlier said he was "proud" that the citizen's income would be available from March, "lifting over five million people out of poverty".

The 2019 budget allocates a total 10 billion euros for the basic citizen's income, seven billion euros for the planned pension reforms, two billion euros for the flat tax and a further billion euros for new hirings in Italy's security forces, Five-Star and League party sources said on Thursday.

The populist government announced on Wednesday a budget deficit target of 2.4 of economic output for 2019, falling to 2.1 percent of GDP in 2020 and 1.8 percent of GDP in 2021. It lowered the deficit target for 2020 and 2021 after its initial plan to keep the deficit at 2.4 percent for both these years unnerved financial markets and European authorities.

The government claims that due to its plans to invest billions of euros in the economy, Italy’s growth will outperform EU forecasts and debt will continue to fall despite its plans to increase the deficit.

The government's spendings plans need to be submitted to the European Commission by mid-October and must be approved the Italian parliament during the course of the month.