Italy's outgoing government hails new income scheme a success

Italy's Prime minister Paolo Gentiloni arrives on the first day of a summit of European Union (EU) leaders at the EU headquarters in Brussels, on March 22, 2018.
Italy's Prime minister Paolo Gentiloni arrives on the first day of a summit of European Union (EU) leaders at the EU headquarters in Brussels, on March 22, 2018. PHOTO: AFP

ROME (AFP) - Italy's outgoing government said Wednesday (March 28) that a new minimum income scheme launched at the start of the year is working, but needs to be beefed up further with additional resources.

Prime Minister Paolo Gentiloni has officially tendered his resignation after his centre-left government was defeated in the March 4 general election, but he is continuing to run day-to-day affairs until a new administration can be formed.

And presenting a report on how the so-called "inclusion scheme" or REI has performed so far, Gentiloni said that the monthly allowance for people in financial difficulty was actually working.

Under the REI scheme, payments range from 190 euros (S$307) for a single person to 540 euros (S$870) for households of six or more.

"Three months after its launch, we can say that the inclusion scheme works," Gentiloni told a news briefing.

"We know that this is an important step, but we must continue by reinforcing it with new resources."

Gentiloni said that some 316,000 people have have already benefitted from the REI. And from July, that number will be gradually expanded to eventually reach 2.5 million people. The government has earmarked two billion euros for funding in 2018.

In January, Italy's unemployment rate was 11 per cent, according to figures from national statistics agency ISTAT, above the eurozone average of 8.6 per cent.

The jobless rate for the under-25s in Italy stood at 31.5 per cent.

According to ISTAT, 4.7 million Italians were living in poverty in 2016, a nearly threefold increase from the 1.7 million recorded in 2006.

REI is similar to systems of income support - such as the RAS is France - that have long existed elsewhere in Europe but its introduction is a first for Italy.

It also has similarities to the basic income promised during the election campaign by the Five Star Movement (M5S), which became the largest party in Italy's hung parliament after the election.

The outcome of the vote on March 4 was inconclusive, with the right-wing coalition and the anti-establishment party M5S winning the biggest shares of the votes, while Gentiloni's centre-left coalition slumped to third place.

Under the M5S proposal, 780 euros would be paid monthly to the unemployed, while those who each month earn less than that sum, considered the poverty line by ISTAT, will receive a top-up.

In all, it would benefit nine million people, a much larger base than the one the current government is targeting with REI.

National insurance agency INPS claims that the M5S's measure would cost Italy 35 to 38 billion euros, more than double the 14.9 billion estimated by ISTAT.