Jo McKenna: Italy Correspondent on the tax cuts for the middle class, failed referendum

Italy’s squeezed middle class could be getting a breather. 

Tax cuts are at the top of Prime Minister Giorgia Meloni’s agenda, as she says the middle class is the backbone of the Italian production system. 

She says they want to make the system fairer.  

Italy Correspondent Jo McKenna told Mike Hosking she’s reduced the tax rate from around 26% to 24% so far.  

She says they’re likely going to need to do a lot more, because many are still struggling financially. 

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Episode Transcript

Speaker 1 (00:00):
To Italy. We go, Joe, very good morning, good money mane.
Now the business of these referenda. I was talking to
my sister about that. She didn't vote them. As far
as I can work out, most people didn't vote. Because
they didn't vote, the whole thing was null and void.
Is that how this works?

Speaker 2 (00:13):
Yeah? Pretty much.

Speaker 3 (00:15):
They needed a fifty percent threshold to make it legitimate.
Only around thirty percent of the voters took part in
this referendum. We had five different issues on the ballot.
I think we might have talked about that last week.
The main one was to have the length of time
required to live in Italy before applying for citizenship, reducing
that number from ten to five years. And not enough

(00:37):
people showed up, so everything was tossed out.

Speaker 1 (00:39):
Is this scene as a waste of time? Because we
had the same thing here we It's called citizens initiated referendus.
So you go around the malls and you get a
whole lot of people to sign up. If you get enough,
they verify the numbers and then you have a vote.
But the vote's non binding, and if no one turns
up and no one can be bothered, well what's the point.

Speaker 2 (00:55):
Yeah, exactly.

Speaker 3 (00:56):
I think it's a major setback though for the center
left Democratic Party and the leader Ali Schlein, particularly because
the Prime Minister Georgia Maloney was against the referendum. She
discouraged people from voting. She went to the ballot box
but didn't actually cast a ballot. And what we're seeing
in the figures, interestingly, her popularity has risen slightly in

(01:18):
the last few days. It's around around still around thirty
percent of the electorate's support, but interestingly too, we're seeing
some slight increase in the center left at around twenty
three and a half percent, so that's quite an interesting
trend away.

Speaker 1 (01:35):
So she's into text cuts. When we say textcuts for
the middle class, who are the middle class? And what
she took? What sort of money we're talking about, Yeah.

Speaker 2 (01:43):
Well what is the middle class?

Speaker 3 (01:44):
But I mean the average person in Italy is still
taking home fifteen hundred to two thousand euros a month,
which is not very much money. And she has reduced
the tax rate from around twenty six percent to twenty
four percent. She wants to do more for those people
in the middle I think they're going to need a
lot more to really get them going because a lot

(02:07):
of people I think are still struggling economically.

Speaker 1 (02:09):
What's your top rate? Off the top of your head,
do you know? I mean, you know if you're in
a lot, I mean, do you have a lot of Texas?
Do you have like we've got far too many, We've
got like you know, fourteen, seventeen, nineteen, thirty, three, thirty.
It just goes up and other up.

Speaker 3 (02:22):
Yeah, it's pretty hard to keep track here. I wouldn't
want to name the top rate. But what is incredibly
difficult for business is if they if you want to
hire someone and put them on staff full time with
an indeterminate contract for a lengthy period of time, you
have to pay an enormous amount of tax to the
government to hire that employee. And I think that's what
really deters a lot of business growth in this country.

Speaker 1 (02:44):
I've just been taught by my research department that your
top text rate is forty three euros over seventy five thousand.
Seventy five thousand in New Zealand terms, is not a
big salary. It's in fact it's less than the average
salary and you're paying forty three cent. You're very heavily.

Speaker 2 (03:01):
Taxed, very heavily taxed.

Speaker 3 (03:03):
I mean, we still see a socialist, center left economy
in this country. Public healthcare one hundred percent, public health care,
schools are free, you know. So there are a lot
of benefits for people in this country still that are
left over from the past.

Speaker 1 (03:19):
It's a fascinating thing, isn't it, because you know my
passion for Berlusconi. How is it berl of Scone? You
got to be so popular and yet your economy is
so seent to lift.

Speaker 3 (03:29):
Yeah, you would have thought that he'd done more to
try and remove some of those old fashioned ideas, but
that certainly hasn't happened because I think that's embedded. But
we might see some more changes under the Maloney government.

Speaker 1 (03:41):
So are you School holidays started yet?

Speaker 3 (03:44):
School hot days have started, and there's some interesting stories
coming out that a growing number of Italian parents are
turning to psychologists to help them try and get through
the summer holidays because they.

Speaker 2 (03:55):
Go forever in this country.

Speaker 3 (03:57):
They go for about thirteen weeks, which is longer than
most other countries in Europe, and among working mothers sixty
three percent, so they feel exhausted during the summer holidays.
I don't think I don't think that they're are Robinson Cruso.

Speaker 1 (04:10):
There thirteen weeks now once again I'm probing into Italian society.
But that's the same thing. When your kids off for
thirteen weeks and you don't get thirteen weeks leave as
a parent, which you won't, what do you do?

Speaker 2 (04:24):
Well, it's incredibly difficult.

Speaker 3 (04:25):
People who have a bit of extra money send the
kids off to some sort of camp in the middle
of it, some school camp. But most of them are
really juggling, and in the old days they would have
had a lot more support from the grandparents. That sort
of tradition doesn't exist anymore, so the mothers and fathers
are really juggling their jobs while trying to keep the
kids busy.

Speaker 1 (04:44):
Does anyone ask the question? See thirteen weeks for a
kids seems to me to be too long, right, So
the kids board witless after about five or sex and
they're going, I've done all I want to do, And
does anyone go, why don't we spread them out, change
them about a bit or not?

Speaker 3 (04:56):
Really? I haven't seen much of a debate about that,
but maybe we should put the on the.

Speaker 1 (05:00):
Agenda exactly tell them about Peter Dunn. Nice to see you,
Jojoe mckinna artiicately. But remember Peter Dunn used to come
up with that idea every at the end of every
summer here in New Zealand, we need to shuffle around
the holidays, because I think he was on to something.

Speaker 3 (05:12):
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