The newly appointed government of Spain has approved the budget for next year that will see higher taxes for high earners and raise 6 billion euro to bring the country back to a more stable heading in 2012.
The budget also sees 8.9 billion euro in spending cuts, which Vice President and government spokesperson Soraya Sáenz de Santamaría said is “the beginning of the beginning”.
There is also a freeze on the salaries of civil servants, which had been cut by 5% by the previous government, and they will see a 1% increase in pension. There will be a freeze on recruitment in the public sector, with the exceptions of health, education, police and tax inspection.
Income tax will rise for high earners, but this would be a temporary measure lasting just two years. The average and lower paid workers would not see any dramatic increase in their tax demands. Previously, the government had announced a freeze on the minimum wage of 641.40 euro per month.
Property tax will also increase, but only through 2013 but it is not thought that this will have a big impact due to property prices being at an all time low.
There will be another, more substantial budget announcement in March, but this initial plan is set to sow the seeds for the future stability and growth in what some people feel was a struggling country.
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