SPAIN’S Prime Minister has signed an agreement with the leader of his leftist allies in Parliament to include a minimum wage increase and tax hikes in the draft 2019 budget.
Pedro Sanchez and Pablo Iglesias, the head of the anti-austerity Podemos, signed the 50-page document outlining their budget plans at the Prime Minister’s residence of La Moncloa on Thursday.
The Prime Minister said the budget put the Spanish people at the centre of politics.
“This is our shared goal that we brought into being today. We are working to get other parties to join our agreement for the budget which will expand rights and improve people’s lives,” Sanchez said.
Podemos leader Iglesias said putting people at the centre of politics was not incompatible with financial stability while claiming the plans would leave austerity behind.
“The agreement reached with the government will improve the lives of the people of this country,” he said.
The largest ever increase to Spain’s minimum wage is now among the measures set to be put forward for next year’s budget.
The rate would rise from €736 a month to €900 a month, or by 21 per cent, if Parliament backs the plans.
Government spending would rise by an additional €5.1 billion under the plans if passed. Maria Jesus Montero, Spain’s Finance Minister, said the increase would be covered by almost €5.7 billion extra coming into the treasury’s coffers from tax hikes and reforms.
The document itself stated the spending plans would see an extra almost €2.1 billion spent. Those calculations do not include pension payments and other welfare outgoings.
Ignacio Cosido, a leading spokesperson from the opposition conservative Partido Popular (PP), said the budget would lead Spain to go hungry “like Venezula” in the next few years.
Alberto Nadal, a PP economy spokesperson, said: “The budget contains the used of the next economic crisis and recession for the Spanish economy.”
Additional measures in the plans include spending increases on state housing, extra aid to low income families and an rise of 6.7 per cent on civilian research and development funding.
These would be funded by measures including a 3 per cent tax on digital companies and a 1 per cent equity tax on fortunes of more than €10 million.
Sanchez will now have to court smaller parties in Parliament including Basque and Catalan nationalist groups to get the measures passed.