Government approves General State Budget for 2016

Moncloa Palace, Madrid

The Council of Ministers approved, for submission to Parliament, the Draft Law on the General State Budget for 2016, and accounts with a decisively social focus, which open up a period of sustained growth and job creation, as announced by the President of the Government, Mariano Rajoy, in a press briefing.

The Budget ratifies the economic policy implemented over the last four years and culminates the fiscal policy developed by the government during this period. The marked improvement in the economic situation clearly highlights that the fiscal policy employed since the start of the term of office was the right one.

The public accounts start with the tax reform, which was brought forward to the month of July 2015, instead of January 2016, when it had been due to come into force, and include a major increase in the resources transferred to the regional governments, which will serve to improve benefits in terms of healthcare, education and social services. In total, an increase of some 8 billion euros in funding will be allocated to the autonomous regions in 2016.

Total non-financial revenue for 2016, following transfers to the regional governments will amount to 134.77 billion euros, which represents a 0.8% increase on the 2015 Budget.

The positive impact of growth and the effect of tax revenue mean that budgeted spending is marked by social recovery. In this regard, a little over half of all public spending, 53.5%, is allocated to social spending, a 3.8% increase on 2015. The reduction in spending on unemployment and the financial burden of the public debt have made it possible to increase social spending.

Public sector workers

Public sector workers, whose contribution was essential for exiting the crisis, will enjoy a 1% salary increase, having had their salaries lowered in 2010 and experienced various years of wage freezes. Furthermore, they will receive half of the extra payment that they were denied in 2012. On another note, the replacement rate of 100% for priority sectors, such as healthcare, education, the State law enforcement agencies, social services and the tax agency will be reintroduced for public workers. Other sectors will have a 50% replacement rate.