Budget Law: Government Focuses on Families, Employment, and Pensions

We have reached one of the most anticipated moments of the year. Approved last Wednesday by the Council of Ministers, the text of the 2025 Budget Law was endorsed by the Quirinale and submitted to the Chamber of Deputies, in accordance with the principle of alternation. The document arrived in Parliament just three days past the October 20 deadline, but it’s still the fastest submission of a Budget Law in the last thirteen years, during which Italy has seen eight different governments. This marks a significant achievement for the government, which has just celebrated its second anniversary. The budget law is the fundamental measure that outlines changes to the state’s spending and revenues for the coming year. This year’s version, containing 144 articles, is now up for review and approval by Parliament by year’s end, where adjustments may be made, though it’s likely the core structure will remain as outlined by the government, as explained in last Wednesday’s press conference.

The 2025 financial measure involves around 30 billion euros, aimed at addressing a range of social, economic, and fiscal issues of national urgency. The law focuses on supporting families, reducing the tax wedge, and funding healthcare, while maintaining a prudent approach to controlling the public deficit. As tradition dictates, the measure has already sparked an intense parliamentary and public debate, drawing criticism from the opposition, which claims the maneuver is insufficient in addressing the needs of citizens and that resources are used ineffectively.

Key interventions include renewing and enhancing the birth incentive and supporting large families, with measures like the universal allowance for newborns and nursery bonuses. Additional social benefits include the “Dedicata a te” card, refinanced to assist low-income families, and the fund for non-self-sufficiency. On the fiscal front, the government has confirmed the tax wedge reduction, expected to support middle- and low-income employees, as well as tax relief on productivity bonuses for workers with dependents.

The measure also includes pension provisions, maintaining flexibility measures such as Ape Sociale, Opzione Donna, and Quota 103, with incentives for those choosing to continue working beyond retirement age. However, minimum pensions will see only a slight increase, criticized by the M5S as “a dime-a-day handout”. Despite hopes for a more radical pension reform, the government has chosen to maintain these measures without major structural changes.

The opposition, led by the PD and M5S, has strongly criticized the budget structure, arguing that the spending fails to meet the needs of economic growth and social support. Furthermore, debate has intensified around the planned 2.4 billion euros in ministerial spending cuts for 2025, which some see as a move that could undermine the effectiveness of public services and reduce investments in crucial sectors such as education and healthcare.

The next step is the parliamentary review, starting next Monday in the Chamber with hearings in relevant committees. Amendments will be presented between Friday, November 8, and Sunday, November 10, sparking what is expected to be an intense parliamentary debate. The law will thus be subject to modifications, particularly if the majority allows the submission of amendments by its own members—a move that in past years, and especially last year, was often restricted to avoid significant alterations to the initial draft.