Superbonus 110%, here’s who and how raised the alarm about the public accounts
Building bonuses: comments and scenarios by the economist Giuseppe Pisauro when he was president of the Parliamentary Budget Office, the independent body responsible for producing analyzes and checks on the macroeconomic and financial forecasts made by the government.
The Meloni government archives the home bonus season , from 100% superbonus to building bonuses with a discount on the invoice. "It is not at all true that this measure is free," said the Premier during her social column, "Giorgia's notes". The superbonus 110 would have dumped almost 2,000 euros on the shoulders of every citizen , "including those without a home, including the homeless and newborns". From Friday 17 February 2023, the ban on making use of these concessions was triggered.
MEETING WITH TRADE ASSOCIATIONS
On the afternoon of Monday 20 February, the Government will meet the trade associations at Palazzo Chigi, convened by Undersecretary Alberto Mantovano. The presidents of Ance Federica Brancaccio, Confindustria Carlo Bonomi , Confedilizia Giorgio Spaziani Testa , Confapi Cristian Camisa and the alliance of Italian Cooperatives Maurizio Gardini will be present. First there will be a summit with the representatives of Abi, Cdp and Sace , for a discussion on the rules that block the transfer of building bonus credits.
COTTARELLI: “110% BONUS TOO GENEROUS AND TOO EXPENSIVE”
If the opposition has attacked the government's choice, a dissenting voice within the Democratic Party is that of the former economist of the International Monetary Fund and senator of the Democratic Party, Carlo Cottarelli. “Given that I am speaking in my name and not of the Democratic Party, given that I am not registered, my answer is yes: the government has done well – said Carlo Cottarelli to Corriere della Sera -. It was an exaggeration, clearly there was a need to support the construction sector and action will still have to be taken , bearing in mind that we have the problem of renovating our buildings. However, a 110% bonus that could be used with the transfer is too generous and too expensive for the state. On my initiative, the Senate Finance Committee has launched a fact-finding investigation into the tax credits”.
PBO: DIFFICULT TO PREDICT IMPACT OF INCENTIVES ON PUBLIC ACCOUNTS
The economist Giuseppe Pisauro (in the photo) had thought of sounding the alarm about the excessive generosity of the superbonus as president of the Parliamentary Budget Office (UPB) , the independent body that deals with producing analyzes and checks on macroeconomic forecasts and finances made by the government. The main difficulty encountered – he underlined during a parliamentary hearing in November 2021 – was that of " predicting the actual impact of the greater incentives on spending decisions , a circumstance made more problematic by the fact that the Superbonus for the first time fully covers the costs, with ceilings on eligible expenditure higher than those envisaged for other incentive interventions concerning real estate".
SUPERBONUS 110: FINANCIAL EFFECTS LASTING FOR A DECADE
To explain the size of the measure, the UPB goes on to rattle off the figures at stake. "The Technical Report (of the government, ed. ) estimates the total cost of the Superbonus extension measures at around 14.1 billion, of which around 14.7 in disbursements and 0.6 in higher revenues deriving from the emergence of the tax base – continue the report -. The financial effects are protracted over a decade due to the possibility of benefiting from the transferable tax deduction or credit relating to the Superbonus over a period of 5 years (4 years for expenses incurred after 2022), a time halved compared to that envisaged by the legislation in force before DL 34/2020 (10 years). Approximately 82 percent of the lower revenue will be observed from 2025. The greatest burden derives from the extension of the application of the Superbonus to condominiums, at 110 percent for 2023 and at a reduced rate in 2024 and 2025, which alone is worth about 13.2 billion”. In addition to the cost of the extension of the Superbonus "approximately 3.6 billion are added relating to the extension of the Ecobonus to 65 and 50 per cent, for a total of 17.4 billion in lower tax revenues".
ENEA MONITORING: ACCEPTABLE INVESTMENTS FOR ENERGY REDEVELOPMENT OF OVER 9.7 BILLION
The Upb had relied on monitoring by Enea to get an indication of the extent of the subsidized interventions in the first phase of application of the 110 percent Superbonus. “As of 31 October, monitoring shows a total of subsidized investments in energy redevelopment (therefore excluding anti-seismic interventions) of over 9.7 billion, to which future subsidies of around 10.7 billion correspond . Two months from the end of 2021, the interventions already admitted to the subsidy therefore constitute around 85 per cent of those expected for the first 18 months of application of the provision, in any case not taking into account the downward revision of expenditure for 2020 carried out in headquarters of the Technical Report of the budget law for 2021".
ECOBONUS VERSUS SUPERBONUS 110: INCREASE IN AVERAGE EXPENDITURE PER INTERVENTION
The Upb then concentrated on the territorial distribution of building subsidies. "Above all due to the different types of works admitted, but also to the different extent of the subsidy measure (deductions of 50 and 65 per cent instead of 110), the set of interventions subsidized with the Superbonus differs significantly from those benefitted in the past with the 'Ecobonus , which involved a much larger number of interventions of smaller amounts (about 395,000, for an average unit expenditure of about 8,800 euros)”, notes the PBO acknowledging the success of the measure.
SUPERBONUS 110: MANY SHIPYARDS IN SOUTHERN ITALY
The use of the Superbonus measure "detectable by ENEA monitoring" shows that it is much "higher in the South compared to what can be detected in the Center and in the North" and this unlike what happened with the Ecobonus 65. "For example, in Calabria the subsidized spending on an annual basis with the Superbonus is more than 10 times that subsidized in the past with the Ecobonus , more than 6 times in Campania and Sicily, 3 times in Lazio and 1.2 times in Lombardy. In Piedmont, Liguria and Valle d'Aosta the average annual expenditure subsidized with the Superbonus was instead lower than that subsidized with the Ecobonus – reads the PBO report -. This has led to a partial territorial rebalancing of the distribution of benefits: if over 72 percent of the expenses subsidized with the Ecobonus flowed to the North and only 11 percent to the South, with the Superbonus the shares go respectively to 44 percent and at 34 percent."
THE FACTORS THAT EXPLAIN THE COST EXPLOSION OF THE SUPERBONUS 110
There are several factors that explain these geographical differences. First of all, the high size of the recognized tax deduction and the possibility of resorting to the discount on the invoice has given the possibility of accessing the subsidized interventions " also to subjects with relatively lower incomes and with liquidity problems ". Secondly, "the growing demand for energy requalification services" may have contributed to increasing the prices "of subsidized services and raw materials". Istat data indicate "overheating of prices in the construction sector, with the construction costs of buildings having grown respectively by 12 per cent for industrial buildings and 5 per cent for 27 residential buildings since July 2020, while on the consumer prices side no significant increases have been reported (+1.3 percent from July 2020 to October 2021, about half the growth of the general index). Furthermore, the fact that the Superbonus covered the entire cost of the restructuring caused the negotiation between suppliers and buyers to cease and "increased the overall burden of the measure".
PISAURO'S ADVICE: ENOUGH WITH THE DIY
The economist Pisauro returned to this last point in an article in the newspaper " Domani ". “The excessive generosity of the superbonus (110 percent of expenditure) and of the façade bonus (90 percent of expenditure) has eliminated any conflict of interest between property owners and construction companies with the consequent abnormal increase in prices – writes Pisauro -. There is some evidence , in the case of the superbonus, of an unsatisfactory cost-benefit ratio in terms of reducing emissions compared to other measures. Moreover, about half of the subsidized expenditure concerns ancillary interventions, the so-called trailed interventions, other than the boiler and thermal coat. In short, in addition to being unsustainable from a financial point of view, it is also of dubious effectiveness ”. The advice that comes is not to rely on "do it yourself" but to channel the majority of resources "towards targeted programs of urban renewal, on the one hand, and the development of renewable energies on the other. Programs that would also benefit the less well-off, lacking fiscal capacity".
FRAUDULENT BEHAVIOR
Finally, given the generosity of the measure and the transferability of the tax credit to third parties, "fraudulent behavior" may have occurred. In this regard, the Revenue Agency has intercepted several frauds especially in the first phase of implementation of the Superbonus "referring above all to transfers of non-existent credits relating to construction work not carried out, signaling the identification of approximately 800 million credits of which would be almost certain non-existence". Precisely to prevent fraud, or limit it, the budget bill provides for "the application of new expenditure ceilings for specific categories of goods to be identified with decrees of the Minister of Ecological Transition" and "a general strengthening of the control activity by the Agency also through preventive checks on the profiles considered most at risk".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/superbonus-110-ecco-chi-e-come-aveva-lanciato-lallarme-sui-conti-pubblici/ on Mon, 20 Feb 2023 11:22:48 +0000.