Rome

Letta eyes minister salaries cut, property tax

IMU wrangle continues

Letta eyes minister salaries cut, property tax

(By Denis Greenan). Rome, May 9 - Premier Enrico Letta was set to send a signal to voters unhappy with political perks by scrapping double pay for ministers at his first real cabinet meeting Thursday. He was also seeking to grasp the nettle of a crucial property-tax issue threatening his new and unprecedented left-right coalition, but continued wrangling on this contentious point delayed the start of the meeting. In the first move, aimed at easing anger behind a protest vote that propelled anti-establishment comedian Beppe Grillo's 5-Star Movement into third place in parliament, Letta said his executive would scrap the system in which cabinet members get two salaries, one for being a minister and one for being a lawmaker. "The money generated will go to protect those who have lost their jobs". The property tax, IMU, was much the more important issue, however. It has been at the centre of a furore that threatened to sink Democratic Party (PD) deputy head Letta's fledgling executive. Ex-premier Silvio Berlusconi has said his People of Freedom (PdL) party would pull its support from the government unless the widely despised tax was abolished. Berlusconi also wants the 2012 revenues collected from IMU returned to taxpayers to respect a key pledge he made in the run-up to February's inconclusive general election. Letta had said that June's IMU payments would be suspended as part of a review of the tax, but he did not promise to abolish it completely. Going into the cabinet meeting, PD sources said June's payment would be put off until September, but only on primary residences. This was apparently not enough to please the PdL cabinet members including its secretary, Deputy Premier and Interior Minister Angelino Alfano, who huddled with Letta and Economy Minister Fabrizio Saccomanni before the cabinet met, pushing back its start from five o'clock to beyond seven o'clock. "There are still many uncertainties," political sources said. Italian industrial employers' confederation Confindustria and the OECD have said reducing labour taxes to help fight record levels of unemployment should be a higher priority for Letta's government than scrapping IMU. Another urgent measure the cabinet was poised to take was to stop the budget for CIG unemployment benefits running dry amid soaring demand as the recession continues to bite. Political sources said before the cabinet meeting that the postponement of June's IMU payment and the refinancing of the CIG budget would be put into a single decree. To cement government cohesion and try make a definitive deal over IMU, Letta called a summit of his executive for Friday. The government is also set to bond and build team-skills in an upcoming soccer-style 'retreat' at a Tuscan monastery this weekend. Letta and his team will take a coach to the abbey near Pisa on Sunday. Berlusconi saw a four-year sentence for tax fraud and five-year ban from public office upheld on appeal Wednesday and is on trial for paying for sex with a minor but has stressed his legal cases will not affect government stability. He is also facing indictment for bribing a Senator to switch sides but any sentences would only become effective after the second and last level of appeal in Italy's legal system, designed to heighten both defence and prosecution rights after the summary justice of the Fascist era. The government of strange bedfellows was formed two months after the virtual three-way tie that saw the PD get a majority in the House but not the equally powerful Senate, the PdL come second, and M5S a close third. The PD unsuccessfully tried to form a coalition with Grillo before eventually teaming up with their old enemy Berlusconi on the insistence of President Giorgio Napolitano, re-elected to break the impasse and a PD internal rebellion that forced leader Pier Luigi Bersani to quit. M5S is refusing to work with the PD or PdL, seeing them as equally culpable in a corrupt and dysfunctional system Grillo has successfully fulminated against, catching the mood of many voters.

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