Bonuses without a strategy. The Meloni government's birth policies

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Bonuses without a strategy. The Meloni government's birth policies

Bonuses without a strategy. The Meloni government's birth policies

Duties on the family

Fragmented incentives, waving flags, reduced VAT on works of art and perhaps oysters but not on diapers and milk, announced and reneged contributions. How is the government's fight against the declining birth rate going? Not well

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Giancarlo Giorgetti is trying again with the slogan: “Less taxes for those who have children”. The idea, as anticipated by Il Foglio , had already been evaluated for last year’s budget law: “A family quotient for deductions” that would have cost 5-6 billion euros and that, probably for this very reason, did not come to fruition. The Minister of Economy, as reported by Il Messaggero , is now thinking about it again for the next budget law: the proposal is for a “super deduction” for mothers of 2,500 euros for the first child that increases by 5,000 euros for each additional child. The new tax relief would partly be added to some measures for births adopted by the government and partly replace them.

In a recent hearing on the economic and social effects of the demographic transition, Giorgetti said that the government would move to "a structural, integrated and far-sighted approach" through the "simplification and rationalization of existing measures" with the aim of providing "specific deductions that indirectly influence the labor supply". This is the identikit of the "super deduction" for mothers that, in fact, could increase the supply of female labor (unlike the "family quotient" on Irpef which, instead, would have the opposite effect).

In itself, therefore, the measure could make perfect sense, provided that the minister finds the additional resources. But the problem, in reality, concerns the birth rate policies adopted so far by the Meloni government , which have been the opposite of the “structural, integrated and far-sighted” strategy that Giorgetti talks about. On the contrary, it has been a confusing, disintegrated and short-sighted approach. Apart from the strengthening of existing and effective measures, such as the Single Allowance for Children that the government has adjusted to inflation and further strengthened for vulnerable or large families, or the Bonus nido strengthened in the latest budget, for the rest we have seen fragmented or temporary incentives, with the aim of waving a new flag every year and grabbing a few headlines in the newspapers.

With the first budget law, the one for 2023, with a choice that had a strong media impact, the Meloni government lowered VAT from 10% to 5% on infant formula and from 22% to 5% on diapers and car seats. Cost: approximately 180 million euros. The following year, with the budget law for 2024, VAT was brought back to where it was before. The government justified the increase in the tax by saying that, after having controlled the price movement, the discount had not gone entirely to families but had been pocketed for about half by businesses. The decision to raise VAT on infant products is also partly contradictory, because on diapers it was brought to 10% and not the initial 22%. A part of the ineffectiveness of the discount has therefore been maintained, with the paradox that the opposition accuses the government of having increased VAT on diapers, even though it is half of what it was before.

In the meantime, however, the Meloni government has cut VAT to 5% on the sale of works of art and proposes to reduce it on oysters (the Conte government had already cut it on truffles) because, as Minister Lollobrigida says, "they are not luxury goods". The result is that diapers and baby milk are, in fact, "luxury goods" compared to paintings, sculptures and truffles.

Another measure for the birth rate of the Meloni government is the reduction of contributions for female workers with two or more children. The rule, introduced in the Budget Law for 2024, overlapped with the reduction of contributions for all employees and implied, for mothers with at least two children, a complete cut in contributions with a benefit up to a maximum of 3 thousand euros which, according to the calculations of the UPB, reached 1,700 euros per year (140 euros per month). This benefit, however, was foreseen for only one year for women with two children and for three years for women with three children.

With the latest budget law , the government has theoretically confirmed the rule, but in practice it has changed it. On the one hand, the incentive has been extended to women with permanent contracts and self-employed workers (previously unfairly excluded), on the other, the Minister of Labor Marina Calderone has replaced the decontribution with a bonus of 40 euros per month that will be paid in a single installment in December with the thirteenth salary (480 euros against the previous 1,700). The decision was announced a few days ago, halfway through the year. It applies only to women with two children, not to those with three, and it applies only for this year.

Next year, things will change again: we will return to the decontribution, but it is not known how much it will be. It will probably no longer exist if, as Giorgetti wants, the "super deduction" comes into force, which will therefore absorb the decontribution. And it is not even known what will happen to the "New Birth Bonus" , introduced this year, which provides for a one-off payment of 1,000 euros for each child born: it is the brother of the "Baby Bonus", which existed until 2021 and then absorbed by the Single Allowance. It does not seem exactly the coherent three-arrow strategy (direct transfers, services for families, conciliation with female work) that the Minister for the Family Eugenia Roccella is aiming for.

Italy has a huge demographic problem. In 2024, the birth rate fell to an all-time low of 1.18 children per woman, a problem aggravated by the progressive reduction of women of childbearing age: last year, just 370,000 children were born, 200,000 fewer than in 2008. According to Istat projections, the Italian population will fall from 59 to 54.8 million in 2050.

It is not easy to reverse this trend. And it is not even clear that the measures for births are of any use: in countries with very generous programs, from Norway to Hungary, the results are poor. But it is certain that if instead of stable measures, extemporaneous bonuses are adopted, the results will be null: families will simply have the children they already intended to have and then, helped by the CAF or the accountant, they will discover from year to year which bonuses they are entitled to.

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