Ruth Merino: "The Budgets of the Generalitat for 2024 are realistic and reinforce social spending"

The Budget of the Generalitat for 2024 increases by 4.5% and reaches 29,732 million euros
Real expenditure (non-financial budget) amounts to 22,670 million, 2.3% more
The first budgets of the Council of Change increase resources for fundamental services and Sanitat has the most important budget in its history: 8,504 million euros
The budget for 2024, drawn up without knowing the resources of the financing system or the objectives of budgetary stability, renounces the fictitious item of the previous Council
The income of 2024 is conditioned by the pending reform of the financing system and the reduction of 54% of European funds
The cost of debt increased by 1,341 million euros, mainly due to the 112% increase in interest
The accounts affect the efficient use of resources and reflect the savings derived from the elimination of unproductive expenditure

The Minister of Finance, Economy and Public Administration, Ruth Merino, has assured that the Budgets of the Generalitat for 2024 are characterized by being "social, realistic and rigorous", since they reinforce fundamental services with an increase in social items not including the fictitious item. This, as Merino has pointed out, allows the accounts to be managed more rigorously and efficiently, since real income and expenditure figures are projected in all sections.

The Minister of Finance has presented the Generalitat's 2024 budget project after it was approved in the extraordinary plenary session of the Council and after it was submitted to the Courts. The Plenary of the Council has also approved the Law accompanying these budgets.

The budgets for 2024 amount to 29,732 million euros, which represents an increase of 4.5% compared to the initial budget for the 2023 financial year, the last drawn up by the previous Council. Real expenditure (non-financial budget) amounts to 22,670 million, 2.3% more.

The Ministry of Health has the most important budget in history, 8,504 million euros, which represents an increase of 2.13%. With this increase, real spending on Health equals 37% of the non-financial budget for 2024.

The Ministry of Education, for its part, has a budget for 2024 of 6,871 million euros, after growing by 1.2%, while the budget of the Second Vice-Presidency and Ministry of Social Services, Equality and Housing it rises to 2,811 million euros, 0.9% more.

In total, the consolidated resources allocated to social policy (Health, Education and Social Welfare) increase by 2.15% to exceed 18,342 million euros, 396 million more than in 2023.

After thanking the work of all the staff of the Ministry of Finance involved in the preparation of the accounts, Ruth Merino emphasized that we are facing budgets that, in addition to strengthening social spending, make the management to optimize the percentage of investment execution. "It's no use budgeting huge amounts and staying at 10% of the execution. This is not management and it generates frustration", insisted the Minister of Finance.

No data from the current Government

It is also necessary to take into account the conditions that have marked the preparation of this year's accounts, since the current Government of Spain has not facilitated either the forecast of deliveries on account for 2024 or the liquidation of the 2022 financial year .

Without the advance of the resources of the regional financing system, the Council has estimated an income of 12,798 million euros for accounts payable in 2024, plus 2,719 million euros for the settlement of the 2022 financial year, which will be paid next year.

These estimates are based on the latest AIReF report on the projects and the fundamental lines of the budgets for 2024, and if they were confirmed, they would represent an increase of 15.18% with respect to the total revenue of the regional financing system (SFA) subject to the 2023 settlement, which was 13,552 million euros. However, the Minister of Finance has recalled that next year's income is conditioned for one more year, because the reform of the SFA is still pending.

54% drop in European funds

We must add the strong fall that will occur next year in European funds, which will go from 1,164 million euros in 2023 to 530 million in 2024. The fall is 633 million euros in just one year, 54% less, adding the resources of the Operational Program 2014-20 and 2021-27, the React EU Fund and the MRR.

In terms of expenses, the 2024 Budget of the Generalitat is marked by the increase of 1,341 million in the debt chapter, which goes from 6,607 million in the initial budget of 2023 to a total of 7,948 million between debt maturities and interests.

Cost of debt soars 112%

Debt interest spending, in fact, soars by 112% in the Generalitat's 2024 Budget and reaches 870 million euros. Debt interest is the element that contributes the most to the increase in Chapter III (financial expenses), which goes from 464 million to 963 million in 2024.

In contrast, the accounts prioritize the efficient use of resources and reflect the impact of the first savings measures resulting from the elimination of unproductive spending and the reduction of political spending. This explains, for example, the adjustment of 7.74% in the total budget of the instrumental public sector of the Generalitat for 2024, which amounts to 3,851 million euros.

Another example of the "efficient" management that the Council wants to carry out with these budgets is the launch of the new NEFIS economic and financial management system, which, as detailed by Ruth Merino, represents an advance in the field of digitization in the 'Public administration that results in an improvement in management.

Given the organic classification of the expenditure budget, the Ministry that grows the most in relative terms after Health is that of Justice and the Interior, whose budget increases by 2.9% and exceeds 760,778 euros.

Conversely, with respect to the initial budget for 2023, the only ministries with a total budget that is reduced are Finance and Economy (-14.8%); Environment, Water Infrastructures and Territory (-33.9%); Innovation, Industry, Tourism and Commerce (-15.6%), and the Second Vice-Presidency and Ministry of Culture and Sport (-5.1%).

More than 1,176 million euros in remaining MRR

The spending budget of these ministries for 2024 is particularly conditioned by the marked decrease of 54% in the resources from the MRR mentioned above.

The Minister of Finance explained that when analyzing the investments in the Generalitat's Budget for 2024, it should be taken into account that during the financial year not only the credits initially included in the 2024 Budget will be managed, but also the remaining credits of the MRR funds that are shown in the liquidation of the 2023 budget. That is, everything that has not reached the phase of recognised obligation on December 31, 2023.

As of September 30 of this year, these remaining balances amounted to a total of 1,176 million euros in areas such as Infrastructure, whose balances on that date were 144 million euros, or Innovation, with 59 million euros . The 206 million euros from the Ministry of Finance linked to the DGTIC are also relevant.

As detailed by Ruth Merino, the previous Council's low execution of MRR funds has in practice resulted in an increase in the investment potential of some ministries than reflected in the initial budget. When the liquidation of the 2023 financial year takes place, predictably in February of next year, those outstanding amounts will be incorporated into the 2024 budget and will thus increase its real investment capacity.

Regarding the economic classification of expenditure, the 22% increase in transfers, aid and direct subsidies from the Generalitat stands out, up to a record figure of 6,534 million. Chapter I, for its part, reaches 8,817 million euros, 7% more due to the reinforcement of essential public services.

89.3% of these 8,817 million euros in personnel costs are distributed between Education and Health, compared to the 88.7% that figure represented in the 2023 budget. Capital operations, which include direct investments and indirect, exceed 2,548 million euros.

Reinforcement of fundamental services, which account for 83% of the budget

Real social spending has increased by 2.15% compared to previous accounts. Of the total non-financial budget for 2024, 83% of resources are allocated to strengthening public services. By area, the relative real expenditure on Health equals 37% of the total, the highest in the history of the Valencian Community; that of Education represents 29% and that of Social Welfare, 17% of the total.

In the health sector, the Council confirms its commitment to Primary Care, which, in addition to having a new general directorate, is provided with 730 million euros, which represents a third of the total resources in this area Likewise, expenditure to promote more policies related to mental health is increased by 20 million euros and 1.5 million euros have been budgeted in new aid aimed at companies in the third sector.

As for Education, there has been a 10% increase in funds allocated to educational inclusion and an 11% increase in resources aimed at teacher training. Ruth Merino has also pointed out that the budget item relating to educational concerts has increased by 4.9% to reach 715 million euros and that the promotion of Valencian and the commitment to multilingualism at school remains with 19 .5 million euros. These data, as he emphasised, "confirm that there is no retreat on the part of the Council in the promotion of the Valencian, but in the impositions".

The Social Services area is also getting bigger with an increase of 25 million for the year 2024. Specifically, it goes from 2,789 million euros to 2,811. The Valencian income of inclusion is not only maintained, but also increases by 0.6% and reaches 288 million euros. The increase also occurs in the item for Primary Care and Dependency, which grows by 13.6%, and in the offer of socio-health centres, where 1,200 new places are expected.

Finally, Ruth Merino highlighted the substantial increase (+38 %) in funds allocated to equality policies and support for women victims of violence, which went from 26 to 36 million euros.

Tax relief through the Measures Act

Finally, with regard to the preliminary draft of the Law of measures, also approved in the extraordinary plenary of the Council, Ruth Merino has emphasized that it contains tax relief measures for families, especially those with low incomes.

These are, in particular, the six new deductions of a social type for expenses on the purchase of glasses or contact lenses, dental treatments or sports practice.

Deductions are also planned for expenses associated with mental health, chronic or rare diseases and acquired brain damage, or Alzheimer's, which will mean savings already in the 2023 income statement, which will be made next spring.

These deductions in the Personal Income Tax, Ruth Merino recalled, are added to the 99% bonuses in the Inheritance and Donations Tax already approved by the Council with effect from last May 28, which will benefit more than 20,000 taxpayers in the Valencian Community every year.