Generalitat De Catalunya Government of Catalonia Budget 2017

Budget 2017

Generalitat de Catalunya Government of Catalonia Budget 2017

Budget 2017

Generalitat de Catalunya Government of Catalonia

The Nelson Mandela Bridge takes its name in honor of one of the most important politicians of the history who knew how to tend bridges in the fight against the apartheid in his country. Placed in El Prat de Llobregat, between the Port of Barcelona and Barcelona-El Prat airport. Beside the natural protected areas of the Llobregat Delta and of the Llobregat Agrarian Park. It communicates the urban area of the Prat with the industrial estate and the ZAL. Symbol of the political understanding, of the connection of Catalonia with the world, of the relation among the city, the industry and the land.

Barcelona, March 28, 2017

Budget 2017

Generalitat de Catalunya Government of Catalonia

PREPARING THE FUTURE CATALONIA: Social cohesion, balanced growth, quality public services and institutional development

Budget 2017

MAIN FEATURES OF THE BUDGET FOR 2017 Generalitat de Catalunya Government of Catalonia

Priority of Social spending €1,355 m* (79% of the total departmental increase) Social spending increase over 2015

2.7% 0.6%* 7.8% Real GDP growth Deficit target Non-financial and non-earmarked forecast (% GDP) revenue increase over 2015 The economy evolves Raised to 0.6% GDP during the It includes tax measures and an own positively, but lower than Parliamentary procedure (but still prudent estimate of the advance 2016 0.6 pp below law distribution) payments and settlements stated in the regional financing system

€22,611m 74.8% -0.3 points Non-earmarked, non-financial % social spending over Debt to GDP ratio (NNF) departmental spending NNF spending reduction Higher revenues and lower interest payments The share of social spending Restoring long-term sustainability. allows a higher spending increase raises up to 2.9 pp Debt grows below GDP growth

* Draft Budget was elaborated considering a deficit target of 0.5% GDP. Later a new deficit target (0.6% of GDP) was approved. This extra deficit will allow to raise Education budget (140M€) and the future guaranteed income (45M€). 4

Budget 2017

Generalitat de Catalunya Government of Catalonia ECONOMIC AND FISCAL CONTEXT AND 1 BUDGETARY FRAMEWORK

Budget 2017

Generalitat de Catalunya Government of Catalonia Macroeconomic growth is consolidated, thanks to the Catalonia’s position in the world, and begins to reach citizen’s households

Budget 2017

THE ECONOMIC GROWTH IS CONSOLIDATED Generalitat de Catalunya Government of Catalonia Real GDP market prices (% annual change) 5 2.7% real GPD growth expected 4 3.4 3.4 2.7 in 2017 3

The growth is consolidated. The forecasts shows 2 that Catalonia will grow more than the average in 1 the euro Zone (1,5%) and in Spain (2,3%). The real GPD in 2017 will be 232.083 M€ 0 2015 2016 (e) 2017 (e)

Job creation and unemployment rate

100 91.4 30

71.6 25 2.2% full time jobs growth 80 69.0 20 expected in 2017 60 18.6 15 40 Expected to create 69 thousand jobs and 16.0 14.4 10 unemployment rate continues with its trend of 20 5

reduction Jobs created (thousands)

0 0 unemployment unemployment (%) rate 2015 2016 (e) 2017 (e)

Jobs created (thousands) unemployment rate (EPA) (% unemployed /active population) Source: Idescat and Ministry of the Vice-presidency and of the Economy and Finance. 7

Budget 2017

INCREASE IN EXPORTS AND FOREING DIRECT INVESTMENT (FDI) Generalitat de Catalunya Government of Catalonia Evolution of the asset’s export abroad

70.000 € +6,1% 0.5% growth contribution of the external balance 60.000 In million For 2017 exports are expected to grow over 50.000 imports

40.000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Direct foreign investment (FDI) in Catalunya (millions of euros) 6.000 60% increase in FDI in 2015 5.000 +60%

4.000 The incremental current trend confirms the confidence of foreign companies to invest in 3.000 Catalonia, with a greater ability to attract than 2.000 in the years before the crisis 1.000 0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Note: it does not include entities of foreign values possession

Source: Idescat and Ministry of the Vice-presidency and of the Economy and Finance 8

Budget 2017

ECONOMIC RECOVER BEGINS ARRIVING IN HOMES Generalitat de Catalunya Government of Catalonia

After the strong impact of the economic and fiscal crisis, poverty and inequality are Poverty and inequality indicators moderating 2014 2015

The levels of poverty and inequality are attenuated by the income households in 2014 and it is expected to continue Poverty indicators this improvement given the evolution of the economy. But levels are still high % of population at risk of poverty 20.9 19.0 AROPE rate 26.0 23.5

% of population at risk of severe poverty 11.7 10.6

Domestic economy improves its indicators Income inequality

The number of affiliates to Social Security in September Gini Index 33.0 32.3 2016 is 11% higher than at the end of 2013, while Index S80/20 6.5 6.0 household consumption increases 7,6% in constant values. The household debt has been reduced by 7% between the last quarter of 2013 and the second of 2016. But the long- term unemployed shows a slow reduction

Source: Idescat and INE. Note: The incomes are from the year prior to the reference year 9

Budget 2017

Generalitat de Catalunya Government of Catalonia

Revenue increase due to the economic performance and the new tax measures

Budget 2017

NON-FINANCIAL AND NON-EARMARKED REVENUES EVOLUTION Generalitat de Catalunya

Government of Catalonia Var. 2017 / Var. 2017 / Budget Outturn Budget Non-financial and non-earmarked revenues 2015 2015 Actual 2015 2015 2017 M€ % M€ % Personal income tax (advanced payment) 7,418.6 7,418.6 8,038.9 620.3 8.4 620.3 8.4 €1,645.4 m VAT (advance payment) 5,762.0 5,762.0 6,119.0 357.0 6.2 357.0 6.2 Special taxes (tobacco, alcohol, hydrocarbons and energy) (adv.pay.) 2,256.7 2,256.7 2,419.4 162.7 7.2 162.7 7.2 Revenue growth Overall Sufficiency Fund (advanced payment) 626.0 626.0 773.8 147.7 23.6 147.7 23.6 Compared to the budget 2015 Guarantee Fund for Fundamental Services (advanced payment) -845.0 -845.0 -868.2 -23.2 2.7 -23.2 2.7

Regional financing system advanced payments 15,218.4 15,218.4 16,482.9 1,264.6 8.3 1,264.6 8.3 Estimate of the revenue coming Settlements t-2 163.1 269.3 1,616.2 1,453.1 891.2 1,346.9 500.1 from advance payments and Negative settlements 2008 and 2009 -124.8 -124.8 -124.8 0.0 0.0 0.0 - settlements (own estimate based Regional financing system advanced payments and settlem. 15,256.6 15,362.9 17,974.3 2,717.7 17.8 2,611.4 17.0 Inheritance and donations tax 424.1 484.4 547.4 123.3 29.1 63.0 13.0 on GDP variation) increases Wealth tax 441.5 461.7 517.4 75.9 17.2 55.7 12.1 €2,717.7 m Tax on transfers and documented legal acts 1,336.4 1,474.2 1,755.7 419.3 31.4 281.5 19.1 Vehicle registration tax 63.6 68.5 74.4 10.8 16.9 5.8 8.5 Tax on hydrocarbons autonomous rate 212.6 211.8 229.8 17.1 8.1 17.9 8.5 Good performance of own taxes Environmental taxes 40.1 30.4 34.6 -5.5 -13.8 4.2 13.7 and totally transferred taxes, along Taxation on gambling 193.2 206.3 228.9 35.7 18.5 22.6 10.9 with implemented tax measures Tax on large commercial establishments 16.2 15.0 14.6 -1.5 -9.4 -0.4 -2.5 Tax on stays in tourist accommodation establishments 43.9 43.2 50.5 6.6 15.1 7.3 16.9 lead to an increase of €784.5 m State tax on bank deposits 0.0 90.0 63.3 63.3 - -26.8 - Tax on empty housing 8.8 0.0 11.5 2.7 30.7 11.5 - Tax on the provision of content by providers of electronic Consequently, dependency on 10.3 7.3 16.1 5.9 57.4 8.8 121.0 communications services other sources of revenue has Tax on beverage with excess sugar - - 31.0 been reduced. Totally transferred and own taxes 2,790.7 3,093.0 3,575.2 784.5 28.1 482.2 15.6 Other non-financial revenues 495.4 699.5 519.4 24.0 4.8 -180.2 -25.8 Other revenues from financing system - - 619.0 619.0 - 619.0 - AD3a EAC + Competitive fund + tax on bank deposits 2,183.1 - - -2,183.1 -100.0 - - Disposal of property investment 316.7 3.9 0.0 -316.7 -100.0 -3.9 -100.0 Other non-financial revenues 2,995.2 703.4 1,138.4 -1,856.8 -62.0 434.9 61.8 Total non-earmarked non-financial revenues 21,042.4 19,159.3 22,687.9 1,645.4 7.8 3,528.5 18.4

Imports in million of euros 11

Budget 2017

PRUDENT ESTIMATION OF REGIONAL FINANCING SYSTEM REVENUES Generalitat de Catalunya Government of Catalonia advanced payments (% GDP) 7.8 8 7.7 7.6 7.7 7.6 +€749 m 7.4 7.4 7.5 more than received in 2016 7

The Spanish Government communicated to the 6 Catalan Government an advance payment calculated on the basis of its budget 2016, 5 which has been extended until adoption of 4 budget 2017. The Catalan Government has 2010 2011 2012 2013 2014 2015 2016 2017 made an estimate taking as a reference the advance payments as a percentage of GDP in the last years.

€1,616.2 m settlement 2015

This amount will be received in 2017. In recent years, the amount of the settlements greatly exceeded the advance payments.

Budget 2017

THE IMPACT OF NEW TAX MEASURES Generalitat de Catalunya Government of Catalonia

Budget Annual Tax 2017 impact

Tax on beverage with excess sugar 31.0 41.3

Environmental risk tax on the production, handling and transport, custody and 28.3 62.8 emission of radioactive elements

New taxes 59.3 104.1

€181.8 m Increase in tax rates on property transfers 4.0 4.8

increase in revenues due to tax Increase in tax rates on documented legal acts 18.7 22.4 measures Increase in tax rates on gambling 9.4 12.6 New taxes improve equity and reduce negative Tax on large commercial establishments 14.6 17.8 externalities Tax on stays in tourist accommodation establishments 3.8 7.7

Tax on empty housing -- -0.3

Modification of personal income tax deduction -- 12.7

Modification of taxes 50.5 77.7

Total tax measures 109.8 181.8

Imports in million of euros 13

Budget 2017

THE IMPACT OF TAX MEASURES Generalitat de Catalunya

Government of Catalonia Outturn Estimation Budget Tax measures 2012 2013 2014 2015 2016 2017 Tax on wealth (recovery and increase of taxation) 305.0 562.7 431.3 461.7 504.3 517.4 Increase in tax rates on documented legal acts tax 40.5 45.6 49.0 63.5 67.1 91.3 Increase in the rates of the autonomous section of the hydrocarbon tax 60.8 139.0 109.1 106.0 102.8 115.0 Tax on stays in tourist establishments -- 35.2 41.0 43.2 45.3 50.5 Tax on large commercial establishments ------14.6 Increase in property transfers tax rates -- 35.0 174.7 199.4 216.9 245.2 Reform of inheritance tax -- -- 45.2 130.5 110.9 140.8 Reform of the civil protection levy ------0.2 0.2 Taxation on gambling ------9.4 €1,281.2 m Modification of taxes 406.2 817.6 850.2 1,004.4 1,047.5 1,184.5

(1) 45.6 4.3 ------Impact of the all tax Pharmaceutical prescription or product tax Judicial fees 5.1 2.1 0.0 2.3 2.3 3.5 measures taken from 2012 Tax on bank deposits (1) -- -- 688.3 ------

Tax on the provision of content by providers of electronic communications ------7.3 15.5 16.1 services (2) Tax on the production of electric energy of nuclear origin (1) ------30.3 -- -- Tax on the emission of gases and particles into the atmosphere produced by ------0.1 1.0 2.2 industry Tax on the emission of gases and particles into the atmosphere commercial ------3.0 4.1 aviation Tax on empty housing(2) ------11.5 11.5 Tax on beverages with excess sugar ------31.0 Environmental risk tax on the production, handling and transport, custody and ------28.3 emission of radioactive elements Creation of new taxes 50.7 6.4 688.3 40.0 33.2 96.7 Total tax measures 456.9 824.0 1,538.5 1,044.3 1,080.6 1,281.2 Imports in million of euros (1) Declared unconstitutional (the settlement of the Tax on deposits in credit institutions was not effective). (2) Pending resolution of the appeal filed by the State before the Constitutional Court. 14

Budget 2017

Generalitat de Catalunya Government of Catalonia

Sustainability of finances and improved payment terms to suppliers to reduce financial dependence

Budget 2017

DEFICIT REDUCTION Generalitat de Catalunya

Government of Catalonia Deficit evolution and propect (% of GDP) 0 -0.24 -0.60 -1 -0.60 -0.93 deficit as % of GDP 0.6% -2 -1.93* -2.14 Raised to 0.5% GDP during the Parliamentary -2.52 -2.33 -2.27 -2.53* -3 procedure

-4 -4.11 -4.48 -5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 outturn outturn outturn outturn outturn outturn outturn outturn outturn outturn target target

Deficit target by government level 2017 (% GDP) Target distribution Target revision The deficit target should be above Initial targets (1) consistent stability 2016 (2) 1% law (3) Central Administration -1.30 -2.40 -1.92 The allocation of the deficit objectives continues Central Government -1.10 -1.50 - not to reflect who is responsible for the Social Security -0.20 -0.90 - expenditure, breaching with the Law of Budget Autonomous communities -0.10 -0.50 -1.18 Stability (and AIReF’s recommendation) Local government 0.00 0.00 0 Total administrations -1.40 -2.90 -3.10 Source: IGAE and Ministry of the Vice-presidency and of the Economy and Finance staff calculation. (*) Observed deficit with one-off operations -2.67 (2014) and -2.89 (2015). (1) Approved on July 15th 2015 by Congress. (2) Targets included in the 2016 Stability Program, approved by Council of Ministers on April 16 29th 2016 (3) Total deficit target approved by European Commission August 8th 2016, distributed by government levels in accordance to stability law.

Budget 2017

THE AVERAGE PERIOD FOR PAYMENT TO SUPPLIERS HAVE BEEN REDUCED Generalitat de Catalunya Government of Catalonia

Average period of global payment providers including social services

80 -38 days of reduction in the average period of payment 70 67 62 63 59 60 54 From the maximum of 67 day in November 47 48 48 2015 to 29 days in December 2016 50 45 43 42 43 40 40 41 39 38 40 35 36 32 32 33 29 30 28 -€2,858 m of reduction in 21 20 pending payments Between October 2015 and October 2016 10

The most significant percentage reductions are 0 in aid for families and long-term care Sept. Oct. Nov. Des. Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. Oct. Nov. Des. Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sept. '14 '14 '14 '14 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15 '15 '16 '16 '16 '16 '16 '16 '16 '16 '16

*Values in terms of days. 17

Budget 2017

DEBT-TO-GDP RATIO IS DECLINING Generalitat de Catalunya Government of Catalonia Debt evolution 40% 45% 35.7% 35.8% 35.4% 40% -0.3 points of debt-to-GDP 35% 38.8% 32.9% ratio reduction 30.1% 35% 30% It fells from 35.4% (2016) to 35.1% (2017) 32.0% 26.8% The debt at 31 December 2017 is expected to 30%

25% be 77,495 million euros. 22.0% 25% 23.2% 23.8% 20% 17.5% 20%

18.7% Debt growth (%) growth Debt 15% 12.7% Debt (% DebtGDP) 15% 10.0% 12.7% 10% 2.8% of projected increase in 7.8% 7.8% 11.1% 10.8% 10% debt 6.1% 5% 5.0% 5% The lowest growth rate of debt since 2007 and 1.6%

close to real GDP growth that is 2.7% 0% 0%

2007 2006 2008 2009 2010 2011 2012 2013 2014 2015

2016 (1) 2016 2017(2) Debt-to-GDP Debt growth

(1) Forecast balance of outstanding debt at 31 December 2016, after the introduction extraordinary FLA corresponding to deficit deviation of 2015. 18 (2) Forecast balance of outstanding debt at 31 December 2017 according to deficit forecast for this year + negative settlement for 2008 and 2009.

Budget 2017

Generalitat de Catalunya Government of Catalonia

Spending grows thanks to the higher revenues and the reduction of interest expenditure despite having a lower deficit target for 2017

Budget 2017

DEPARTMENTS’ SPENDING LIMIT Generalitat de Catalunya Variations over Government of Catalonia Budget 2015 NON-FINANCIAL REVENUES (non-earmarked) +€1,645.4m

€22,687.9m DEFICIT TARGET + €1,095.2m -€344.7m €1,521.1 m Increase of departmental ESA ADJUSTMENTS -€248.9 m spending limit + €659.0m NON-FINACIAL The higher revenues and the reduction of SPENDING LIMIT* interest payments allows a higher increase (non-earmarked) +€1,051.8m* in spending €24,442.0m INTEREST - €799.3m -€913.9m

NON- DEPT. FUNDS +€444.6m €1,032.1m - DEPARTMENTS SPENDING LIMIT*(non- +€1,521.1m* financial & non-earmarked) Amounts in million euros * The new deficit target allows to raise the spending limits during budget execution €22,610.6m 20

Budget 2017

Generalitat de Catalunya Government of Catalonia

SPENDING 2 PRIORITISATION

Budget 2017

BUDGET PRIORITIES Generalitat de Catalunya Government of Catalonia Equal opportunities, equity and Quality public services reduction of inequalities

Preparing the future Catalonia Social cohesion, balanced growth, quality public services and institutional development

Economic growth: R+D+I, infrastructures and productive Transparency, evaluation and sectors institutional development

Budget 2017

Departmental distribution of non-financial non-earmarked spending limit Generalitat de Catalunya Government of Catalonia Budget Budget Var. 2017/2015h Budget section 2015 1 2017 M€ Distrib.% Presidency 404.2 411.7 7.5 0.5 Vice-presidency and of the Economy and Finance 137.1 195.0 57.9 3.8 Transp. and Foreign and Institutional Relations and Affairs 34.2 64.0 29.8 2.0 Resources Governance, Public Administrations and Housing 390.0 424.7 34.7 2.3 allocated to Education 4,432.5 4,771.0 338.6 22.3 Health 8,342.1 8,750.5 408.4 26.8 priorities Home Affairs 1,160.9 1,246.4 85.5 5.6 Territory and Sustainability 1,471.3 1,668.6 197.3 13.0 Culture 228.7 250.6 21.9 1.4 Justice 914.6 949.6 35.0 2.3 Labour, Social Affairs and Families 2,106.0 2,299.7 193.8 12.7 Business and Knowledge 1,200.2 1,274.6 74.4 4.9 Agriculture, Livestock, Fisheries and Food 267.7 304.0 36.3 2.4 Subtotal Departments 21,089.5 22,610.6 1,521.1 100.0 Contingency fund 200.0 330.0 130.0 Other non-department funds 307.8 619.9 312.1 Higher bodies 79.7 82.2 2.5 Debt (interest) 1,713.2 799.3 -913.9 Total non-financing non-earmarked spending 23,390.2 24,442.0 1,051.8 Total primary spending (without interest) 21,677.0 23,642.7 1,965.7

Amounts in million of euros (1) According to new distribution of responsibilities 23

Budget 2017

1.355 M€ INCREASE OF SOCIAL SPENDING Generalitat de Catalunya Variation Government of Catalonia Total Non-financial non-earmarked social spending of social variation(1) spending(1) Health 408.4 408.4 Education 478.6 478.6 Labour, Social Affairs and Families 238.8 238.8 Territory and Sustainability 197.3 153.6 79% of total increase is Business and Knowledge 74.4 46.5 Home Affairs 85.5 -- allocated to social spending Justice 35.0 -- Governance Public Administrations and Housing 34.7 29.0 To attend to basic social needs and vulnerable Agriculture, Livestock, Fisheries and Food 36.3 -- people Vice-presidency and of the Economy and Finance 57.9 -- Culture 21.9 -- Transparency and Foreign and Institutional Relations and Affairs 29.8 -- Presidency 7.5 -- Total departments 1,706.1 1,354.8

17% 21% Altres 30% 18%

79% 35% 1,354.8M€

Imports in millions euros Share of social spending over total Departmental distribution (1) According to new distribution of responsibilities variation of social spending increase 24

Budget 2017

ALMOST 75% OF RESOURCES ARE ALLOCATED TO SOCIAL SPENDING* Generalitat de Catalunya Government of Catalonia

Budget Budget* Variation Non-financial non-earmarked social spending 2015(1) 2017 2017/2015

Health 8,342.1 8,750.5 408.4

Education and Universities 5,211.5 5,736.6 525.1 74.8% of spending is allocated Labour, social affairs and families 2,106.0 2,344.7 238.7 to social spending* Housing, districts and old towns 161.0 190.0 29.0

Public passenger transport 841.4 995.0 153.6 The weight of social spending increases Total social spending 16,662.0 18,016.8 1,354.8

Total adjusted Generalitat (2) 23,190.2 24,071.3

71.8% 74.8%

Amounts in millions euros (1) Homogeneous in line with current areas of responsibility (2) Excluding Contingency Fund and funds to meet the partial refund of the pending extra pay to distribute to departments * Including additional 140 M€ allocated to Education and 45 M€ allocated to Labour, Social Affairs and Families during the parliamentary process. 25

Budget 2017

EDUCATION, AN INVESTMENT FOR EQUAL OPPORTUNITIES Generalitat de Catalunya Government of Catalonia +525.1 millions euros to improve educational services*

+7.099 teaching staff* Education department budget evolution and number of to attend to the increase in number of students and the M€ teaching staff persons reduction school day by one hour and to improve 6.000 80.000 student care. for centers of high complexity 5.000 70.000 To meet the needs of 237 schools and 103 secondary 60.000 schools of high complexity 4.000 50.000 for inclusive school 3.000 New teaching positions and new support teaching positions 40.000 2.000 to improve replacement of teaching staff 30.000 It will cover from the first day work permits of more than 7 1.000 20.000 days and work leaves of the course start from September 1 0 10.000 +€12 m for scholarship dining 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

By ensuring that all families below the risk-of-poverty- Education department budget teaching staff threshold have it

27% more resources for shared schooling units The 2011 spending levels have been recovered and the education +€46,5 m to finance public universities system is provided with the highest number of teachers

Note: comparison with the last approved budget by the Parliament (2015). Allocation data 2013 and 2016 correspond to non approved budget projects. * Including additional €140 m allocated during the parliamentary process. Equivalent to 3,500 new teaching staff , pending to specify during the budget implementation. 26

Budget 2017

HEALTH, CENTRAL ELEMENT TO ENSURE SOCIAL COHESION AND WELFARE Generalitat de Catalunya Government of Catalonia +408,4 millions euros more to make progress on the achievement of an universal, public and equal system

Heath department budget evolution Ensuring the universal health coverage M€ +€127,7 m to cover the increase of prescriptions and 12.000 new approved medicines 10.000 +€35 m more to reduce waiting lists Surgical intervention, diagnostic test or specialist visits. 8.000

+€99 m to improve the attention system for people 6.000 with mental health problems Focusing on a community-based model on prevention, 4.000 employability and accompaniment to families 2.000 +€83 m more for Hospital Medication of Ambulatory Dispensing (HMAD) 0 New drugs, purchasing centralization of oncological 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 medicines and efficiency gains in treatment purchase

+€26 m to improve infrastructures and health facilities Recovered the level of Health spending, which is one of the Government’s key priorities

Note: comparison with the last approved budget by the Parliament (2015) 27

Budget 2017

SPECIAL ATTENTION TO THE MOST VULNERABLE PEOPLE Generalitat de Catalunya Government of Catalonia LABOUR, SOCIAL AFFAIRS AND FAMILIES: +238.8 millions more for social inclusion to build a fairer and equitable society*

€288 m for the integration minimum income Minimum integration income evolution (M€) +105 M€ more for economic benefits and insertion policies 250 It incorporates the Improving long-term care increase of active 200 +53 M€ new concerted jobs employment policies +14 M€ for the operation of residential and day centres associated to the RMI* 150 +€42 m Home care services More resources for programme contracts with local 100 authorities

+€18 m to attend to children and adolescents in risk 50 210 new residential positions €6,5 m care services of local authorities 0 €3,1 m economic benefits to the reception 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

+€20 m for special employment centres

Additional €105 m for provision of the minimum integration income €10 m to tackle energy poverty (RMI) and associated active employment policies. Progressing towards a guaranteed income. Note: comparison with the last approved budget by the Parliament (2015) * Including additional €45 m allocated during the parliamentary process. 28

Budget 2017

HOUSING AND PUBLIC TRANSPORT, SOCIAL RIGHTS Generalitat de Catalunya Government of Catalonia PUBLIC TRANSPORT AND SOCIAL HOUSING 18% growth to face housing emergency and PRICING Additional +€154 m are allocated for to avoid residential exclusion. In total additional +€29 m social, sustainable, safe and efficient model of mobility

+€13 m to attend to housing emergency and eviction policy +€58 m for FGC (including the extension of Terrassa and for economic and social reasons Sabadell) 63M€ are allocated to benefits and family support and the budget line for implementing the Law on protect rights to housing of people for the Metropolitan Transport Authority (ATM) at risk of social exclusion measures increases by 9,7 M€ to 35,6 M€ +€62.5 m Implementation of the integrated fare system “T-Mobilitat” all around Catalonia and social pricing and the functioning of the new stretch of €11.5 m Tax on empty housing Line 9 (L9) Lifting of the suspension by the Constitutional Court and it is allocated to housing policies for Express Bus and for further improving the road +€9 m passenger transport services

+€19 m Fund to encourage neighbourhood programme +€9 m for continuing works in L9/L10 towards Zona Franca Maintaining the commitment to support the comprehensive

rehabilitation of neighbourhoods and urban areas To guarantee the accessibility of people with reduced mobility in metro and railway

Budget 2017

PUBLIC SECTOR PERSONNEL, KEY FOR THE SERVICES QUALITY Generalitat de Catalunya Government of Catalonia

+6,923 new job positions included in Variation Budget Budget the public sector budget. The large Job positions included in the public sector budget 2017 / 2015h 2015 2017 increases are in education, health and Number % security and civil defense Non-university teaching staff 68,969 72,568 3,599 5.2% Police 17,323 17,599 276 1.6% Consolidated the 2016 1% of wage Justice administration staff 7,777 7,813 36 0.5% increase. Contingency fund includes Prison staff 5,019 4,972 -47 -0.9% resources to face future wage increases from Central Government budget Firefighters 3,225 3,324 99 3.1% approval Rural agents 518 523 5 1.0% Other public administration staff 30,925 30,884 -41 -0.1% Partial recovery of the 2012 bonus Personnel of public sector entities 86,899 89,895 2,996 3.4% payment Tax agency of Catalonia 444 903 459 103.4% Health staff 71,528 73,165 1,637 2.3% New call for a public job positions Other(1) 14,927 15,827 900 6.0% 2017

Total job positions 220,655 227,578 6,923 3.1% (1) Financed by own resources of the entities New Government and Public Administration School

Budget 2017

Guaranteeing quality provision of general public services Generalitat de Catalunya Government of Catalonia

Security and Justice and prison emergencies service

• Firefighters strategic plan 2017-2020 • Judicial facilities director plan • New public offers of firefighters • New judicial office positions and Catalan police • Penitentiary facilities plan • Counterterrorism specific operational • Alternative penal measures

programme • E-justícia • Road safety plan

Support to local Culture governments

• GovernsLocals.cat to define how the • Large cultural facilities programme future local administration will be • Cultural heritage programme • The region of Moianès incorporated in • Catalan language promotion programme the Local Cooperation Fund • Comprehensive plan of visual arts which seeks to • Financing improvement for the Consel reactivate the National Art Fund of Generalitat de Generau Val d’Aran Catalunya • Neighbourhood Law programme • To maintain the campaign “You are 6 years old. Choose a book” 31

Draft

Budget 2017

SUPPORTING SUSTAINABLE ECONOMIC GROWTH AND QUALITY EMPLOYMENT Generalitat de Catalunya Government of Catalonia

National Industry Agreement Research, development and Quality infrastructures and environmentally- Foundations for a solid economic recovery innovation friendly growth

Competitiveness of the tourism sector +€21 m more for ACCIO €145 m in road maintenance The higher collection of the tax allows intensify 20 M€ of technological transfers to the policy Eurecat, reference center on industrial +€20 m in water cycle investments and +€21 m innovation in Catalunya, and the for waste recovery and prevention improvement Creative Catalunya TECNIO agents. Supporting the promotion of professional +€16 m for infrastructures in telecommunications projects abroad on the cultural sphere +€12 m to promote research +€5 m more in logistic infrastructures investments Improvement of ICREA programme, €57.4 m for the modernization of the calls financed by European funding and +€23 m for protection, prevention and control of agricultural and fishing infrastructures research activities of IRTA. natural environment and biodiversity

+ €98.6 m more for employability RIS3CAT strategy and ERDF funding Electric Vehicles Recharging Investment Plan programmes (PIRVEC) Territorial model deployment for employment €660 m financial support to policies agreements businesses through the ICF National pact for the energy transition of Catalunya, period 2030-2050 (PROENCAT) • Loans (488 EUR millions), Promoting an agreement with social and • Guarantees (155 EUR millions, in economic agents to adopt a minimum wage Toll discounts linked to efficient behaviors collaboration with AVALIS from Catalunya), To consolidate youth guarantee programme • Venture capital investment (17 EUR millions). Promotion of social and cooperative economy

Budget 2017

RECOVENING CAPITAL EXPENDITURES (INVESTMENT), BUT SLOWLY THAN DESIRED Generalitat de Catalunya Government of Catalonia

€1,575m Capital expenditures 2017

The level of capital expenditures is rslowly in accordance with the fiscal situation

€1,031.9m

Endowment for deferred payment methods in 2017

Imports in million of euros 33

Budget 2017

INSTITUTIONAL DEVELOPMENT AT THE SERVICE OF CITIZENS Generalitat de Catalunya Government of Catalonia

Catalan tax administration Foreign action Deployment of the Catalan Tax Agency (ATC)

€57.4 m budget increase • The foreign sector is the key for economic and It includes the fees expenses from the settlement office social development of Catalonia

• 14 foreign offices 903 job positions 459 additional positions • +€8.8 m for development cooperation

. Total assumption of the Statute’s fiscal competences Democratic quality and  Tax collection after the voluntary payment period finalization  Direct management of assigned taxes public participation

. More deployment in the territory • Promoting public participation • Implementing electronic vote 19 own offices 15 new own offices added to the 4 provincial ones • Ready to decide 11 service points shared with other administrations

Budget 2017

TRANSPARENCY AND A PERFORMING GOVERNMENT TO MAXIMIZE SOCIAL VALUE Generalitat de Catalunya Government of Catalonia

Boosting the evaluation Relevance of use of evidence at decision Assuring public of public policies making and budget resources allocation processes resources being properly spent and providing the desired Expenditure Review Goal: Review all policy areas in the next outcomes in strategic and efficiency 4 years terms

Moving to an Open Government system in Effectiveness in Fiscal fraud prevention plan 2015-2018 order to promote revenue collection citizen’s participation and involvement

Increased transparency New graphical and navigable budget and dissemination of budget tools, improved budget execution information information and open data

Budget 2017

Generalitat de Catalunya Government of Catalonia Equal opportunities, equity and Quality public services reduction of inequalities

Preparing the future Catalonia Social cohesion, balanced growth, quality public services and institutional development

Economic growth: R+D+I, infrastructures and productive Transparency, evaluation and sectors institutional development

Budget 2017

Generalitat de Catalunya Government of Catalonia COMPOSITION OF REVENUES AND 3 EXPENDITURES

Budget 2017

BUDGET INSTITUTIONAL PERIMETERS Generalitat de Catalunya Government of Catalonia €25,292 m €25,361 m €28,310 m €27,813 m

Generalitat Administrative Public Sector PA-ESA Sector Public Sector (1 entity) (182 entities ) (174 entities) (21 entities) It includes Generalitat, Catalan It includes departments Includes Generalitat and all the entities It includes Generalitat, Healthcare Service, autonomous classified as Public Administration and non-departmental Catalan Healthcare Service administrative entities and 161 according to ESA regulations except funds and autonomous entities with majority shareholding public universities (Includes those in administrative entities which Generalitat does no have a majority stake)

Note: chapters 1 to 8. It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). 38

Budget 2017

Entities included in the budget Generalitat de Catalunya Government of Catalonia

Total entities Public sector Subsector PA-ESA sector included in the entities budget

Generalitat 1 1 1 Autonomous administrative entities and Catalan 20 20 20 Healthcare Service Total administrative public sector entities 21 21 21 Autonomous commercial and financial entities 2 0 2 Public law companies 44 41 44 85% of public sector entities are Trading companies 27 16 27 classified in the PA-ESA Sector Consortiums 54 47 54 Foundations 34 30 34 Total majority shareholding entities 182 155 182 Autonomous administrative entities -- 1 1 Trading companies ------Consortiums (2) -- 12 14 Foundations -- 6 6 Total other entities non-majority shareholding -- 19 21 Total entities -- 174 203 (2) Law 40/2015

Budget 2017

Evolution of entities included in the budget Generalitat de Catalunya Government of Catalonia

2011 2012 2014 2015 2017

Generalitat 1 1 1 1 1 CatSalut, ICS, i ICASS 3 3 3 - - Autonomous administrative entities and Catalan 25 23 19 20 20 Healthcare Service Since 2011 the number of public Autonomous commercial and financial entities 5 3 2 2 2 sector entities has been reduced by Public law companies 46 47 43 44 44 25% Trading companies 52 47 30 26 27 Consortiums 62 61 50 50 54 Foundations 46 43 35 37 34 Total public sector entities 240 228 183 180 182 Total other entities non-majority shareholding 28 26 26 24 19 Consortium non-majority shareholding2 - - - - 2 Total entities 268 254 209 204 203

(2) Law 40/2015

Budget 2017

Revenue budget by chapters (economic classification) of Generalitat de Catalunya Generalitat de Catalunya Government of Catalonia Generalitat

Budget Budget Var. 2017/2015h Chapter 2015 1 2017 M€ % 1. Direct taxes 8,766 9,630 865 9.9 Current revenues increase by 13% in 2. Indirect taxes 9,382 10,912 1,530 16.3 2 years due to taxes and also current 3. Fees, sales and other revenue 523 608 85 16.3 transfers 4. Current transfers (2) 1,789 2,235 447 25.0 5. Property revenue 274 41 -233 -84.9 Current revenue (2) 20,733 23,427 2,694 13.0 6. Real investments disposal 100 0 -100 -100.0 7. Capital transfers 796 71 -725 -91.1 Capital revenue 896 71 -825 -92.1 Non-financial revenue (2) 21,629 23,498 1,869 8.6 Capital revenues declines because rd 8. Financial assets 93 83 -10 -11.0 2015 budget includes 3 provision of Statue of Autonomy of Catalonia Total revenue 1 to 8 (2) 21,723 23,581 1,858 8.6 Financial liabilities (repayment of debt excluded)(3) 2,312 1,711 -602 -26.0 Total revenue 1 to 9 (repayment of debt 24,035 25,292 1,257 5.2 excluded) (3)(2)

Imports in million of euros (1) According to new distribution of responsibilities (2) It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). (3) Chapter 9 for refinancing is excluded: €5.290m (2015) and €5.195m (2017) 41

Budget 2017

Expenditure budget by chapters (economic classification) of Generalitat de Catalunya Generalitat de Catalunya Government of Catalonia Generalitat

Budget Budget Var. 2017/2015h Chapter 1 2015 2017 M€ % Current expenditures increases 5% but the reduction of interest 1. Employee compensation 5,112 5,592 480 9.4 payments allows higher increase in 2. Current expend. on goods and services(2) 1,891 2,189 298 15.8 other chapters 3. Interests and financial fees 1,713 799 -914 -53.3 4. Current transfers (2) 13,459 14,574 1,116 8.3 5. Contingency fund 200 330 130 65.0 Current expenditures (2) 22,375 23,485 1,110 5.0 6. Real investments 404 447 43 10.6 7. Capital transfers 588 647 59 10.0 Capital expenditures 992 1,094 102 10.3 Capital expenditure increases 10.3% Non-financial expenditures (2) 23,367 24,579 1,212 5.2 and financial assets 6.7% 8. Financial assets 667 712 45 6.7 Total expenditures chapters 1 a 8 (2) 24,035 25,292 1,257 5.2

Budget 2017

Expenditure budget by departments of Generalitat de Catalunya Generalitat de Catalunya Government of Catalonia Generalitat Budget Budget Var. 2017/2015h Department/sections 2015 1 2017 M€ Distrib.% Presidency 404 412 8 0.4 Vicepresidency and of the Economy and Finance 138 197 59 2.9 Agriculture, Livestock, Fisheries and Transparency and Foreign and Inst. Relations and Affairs 34 64 30 1.5 Food includes de EAGF in draft Governance, Public Administrations and Housing 394 429 35 1.7 budget for the first time Education 4,443 4,821 378 18.9 (€275m) Health 8,399 8,807 408 20.3 Home Affairs 1,161 1,246 85 4.3 Territory and Sustainability 1,472 1,669 197 9.8 Culture 239 261 22 1.1 Justice 917 951 34 1.7 Labour, Social Affairs and Families 2,593 2,872 279 13.9 Education and Business and Business and Knowledge 1,231 1,370 139 6.9 Knowledge departments include Agriculture, Livestock, Fisheries and Food 304 635 331 16.5 educational grants ear-marked Subtotal departments 21,729 23,735 2,006 100.0 revenue for the first time Contingency fund 200 330 130 (€50m and €80m respectively) Other non-departmental funds 3,471 3,889 418 Higher bodies 80 82 2 Debt (interest) 1,713 799 -914 (2) Total 27,193 28,835 1,642 Total expenditure without interest 25,480 28,036 2,556

Imports in million of euros (1) According to new distribution of responsibilities (2) It includes Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). 43

Budget 2017

Revenue budget by chapters of Generalitat de Catalunya Administrative Public Sector Generalitat de Catalunya Administrative Government of Catalonia Public Sector Budget Budget Var. 2017/2015h Chapter 1 2015 2017 M€ %

1. Direct taxes 8,766 9,630 865 9.9 2. Indirect taxes 9,382 10,912 1,530 16.3 The current revenues increases by 3. Fees, sales and other revenue 627 718 92 14.7 12.9% 4. Current transfers (2) 1,754 2,191 437 24.9 5. Property revenue 276 44 -231 -83.9 Current revenue (2) 20,804 23,496 2,692 12.9 6. Real investments disposal 100 0 -100 -100.0 7. Capital transfers 796 71 -725 -91.1 Capital revenue 896 71 -825 -92.1 Non-financial revenue (2) 21,700 23,567 1,867 8.6 8. Financial assets 93 83 -10 -11.0 Capital revenues increase by 8.5% Total revenue 1 to 8 (2) 21,794 23,650 1,857 8.5 Financial liabilities (repayment of debt 2,312 1,711 -602 -26.0 excluded)(3) Total revenue 1 to 9 (repayment of debt 24,106 25,361 1,255 5.2 excluded) (3)(2)

Imports in million of euros (1) According to new distribution of responsibilities (2) It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). (3) Chapter 9 endowment is excluded: €5.290m (2015) and €5.195m (2017) 44

Budget 2017

Expenditure budget by chapters of Generalitat de Catalunya Administrative Public Sector Generalitat de Catalunya Administrative Government of Catalonia Public Sector

Budget Budget Var. 2017/2015h Chapter 2015 1 2017 M€ % The reduction of interest payments 1. Employee compensation 5,248 5,727 480 9.1 allows higher increase in other 2. Current expend. on goods and services(2) 6,413 7,112 699 10.9 chapters 3. Interests and financial fees 1,713 799 -914 -53.3 4. Current transfers (2) 8,864 9,580 716 8.1 5. Contingency fund 200 330 130 65.0 Current expenditures (2) 22,438 23,549 1,111 4.9 6. Real investments 513 567 54 10.5 7. Capital transfers 487 533 46 9.3 Capital 1,000 1,100 99 9.9 Capital expenditures start to recover Non-financial expenditures2) 23,438 24,648 1,210 5.2 their past level 8. Financial assets 668 713 45 6.7 Total expenditures chapters 1 to 8 (2) 24,106 25,361 1,255 5.2

Budget 2017

Revenue budget by chapters of Generalitat de Catalunya Public Sector Generalitat de Catalunya Government of Catalonia Public sector

Budget Budget Var. 2017/2015h Chapter 1 2015 2017 M€ %

1. Direct taxes 8,766 9,630 864 9.9 2. Indirect taxes 9,382 10,912 1,530 16.3 Current revenues increase by 11.3% 3. Fees, sales and other revenue 2,555 2,805 250 9.8 in 2 years 4. Current transfers (2) 2,316 2,869 553 23.9 5. Property revenue 710 234 -476 -67.0 Current revenue (2) 23,729 26,450 2,721 11.35 6. Real investments disposal 251 88 -163 -64.9 7. Capital transfers 822 78 -744 -90.5 Capital revenue 1,073 166 -907 -84.5 Non-financial revenue (2) 24,802 26,616 1,814 7.3 Capital revenues decrease because 8. Financial assets 928 757 -170 -18.4 2015 budget included 3rd AP Statute of autonomy of Catalunya and sales Total revenue 1 to 8 (2) 25,730 27,373 1,643 6.4 of real assets. Financial liabilities (repayment of debt 1,586 937 -649 -40.9 excluded)(3) Total revenue 1 to 9 (repayment of debt 27,317 28,310 993 3.6 excluded) (3)(2)

Imports in million of euros (1) According to new distribution of responsibilities (2) It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). (3) Chapter 9 endowment is excluded: 6.468M€ (2015) and 6.208M€ (2017) 46

Budget 2017

Expenditure budget by chapters of Generalitat de Catalunya Public Sector Generalitat de Catalunya Government of Catalonia Public sector

Budget Budget Var. 2017/2015h Chapter 1 2015 2017 M€ % Current expenditures growth is 1. Employee compensation 9,198 9,929 731 8.0 lower than in Generalitat’s Budget 2. Current expend. On goods and services(2) 7,846 8,298 451 5.8 3. Interests and financial fees 2,055 994 -1,061 -51.6 4. Current transfers (2) 5,811 6,683 872 15.0 5. Contingency fund 200 330 130 65.0 Current expenditures (2) 25,110 26,234 1,124 4.5 6. Real investments 1,170 1,058 -112 -9.6 7. Capital transfers 440 522 82 18.6 Capital expenditure decreases, but by Capital expenditures 1,610 1,580 -30 -1.9 excluding payments of deferred Non-financial expenditures (2) 26,720 27,814 1,094 4.1 investments would show a net 8. Financial assets (3) 596 496 -100 -16.7 increase Total expenditures chapters 1 to 8 (2) 27,317 28,310 994 3.6

Budget 2017

Public Sector Budget of Generalitat Calatunya by policies (chapters 1 to 8 Generalitatincluding earmarked andde own Catalunya resources from entities, but not including PIE and FEAGA) Government of Catalonia Public sector

Budget 2017

Revenue budget by chapters of Generalitat of Catalunya PA-ESA sector Generalitat de Catalunya PA-ESA sector Government of Catalonia (Public administration Budget Budget Var. 2017/2015h according to ESA rules) Chapter 1 2015 2017 M€ %

1. Direct taxes 8,766 9,630 865 9.9

2. Indirect taxes 9,382 10,912 1,530 16.3 In the PA ESA sector there is also a high growth of current revenues 3. Fees, sales and other revenue 2,450 2,652 202 8.3 although it is a biannual fee 4. Current transfers (2) 2,372 2,920 548 23.1

5. Property revenues 625 171 -454 -72.7 Current revenue (2) 23,595 26,284 2,691 11.4 6. Real investments disposal 255 94 -161 -63.1

7. Capital transfers 829 80 -749 -90.3 Capital revenue 1,084 174 -910 -83.9 The reduction in net debt reflects the trend towards the balance in this Non-financial revenue (2) 24,679 26,458 1,781 7.2 sector which it is relevant for the 8. Financial assets 158 95 -62 -39.5 purpose of budgetary stability Total revenue 1 to 8 (2) 24,837 26,554 1,717 6.9 regulations Financial liabilities (repayment of debt 2,013 1,259 -754 -37.5 excluded)(3) Total revenue 1 to 9 (repayment of debt 26,850 27,813 963 3.6 excluded) (3)(2)

Imports in millions of euros 1) According to new distribution of responsibilities 2) It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). 49 3) Chapter 9 endowment is excluded: 6.038 M€ (2015) and 5.743M€ (2017)

Budget 2017

Expenditure budget by chapters of Generalitat of Catalunya PA-ESA sector Generalitat de Catalunya PA-ESA sector Government of Catalonia (Public administration according to ESA rules)

Var. 2017/2015h Budget Budget Chapter 2015 1 2017 M€ % Staff costs increase by 7.1% and 1. Employee compensation 9,269 9,929 660 7.1 current transfers increase by 15.8% 2. Current expend. On goods and services(2) 7,753 8,16 463 6

3. Interests and financial fees 2,037 979 -1,058 -51.9

4. Current transfers (2) 5,779 6,694 915 15.8

5. Contingency fund 200 330 130 65 Current expenditures (2) 25,038 26,148 1,110 4.4 6. Real investments 1,174 1,059 -115 -9.8 Capital expenditures are slightly 7. Capital transfers 456 507 51 11.1 reducing but they would increase if Capital expenditures 1,630 1,565 -64.8 -4.0 payments of capital works already Non-financial expenditures (2) 26,668 27,713 1,045 3.9 executed are excluded 8. Financial assets (3) 182 100 -82 -44.9 Total expenditures chapters 1 to 8 (2) 26,850 27,813 963 3.6

Imports in million euros (1) According to new distribution of responsibilities (2) It doesn't include Local governments share of Central Government’s revenue neither European Agricultural Guarantee Fund (EAGF). (3) Contributions of capital for public sector entities, granting loans and acquisition of other financial assets. 50

Budget 2017

Generalitat de Catalunya All the information available at: Government of Catalonia www.gencat.cat/economia/pressupostos Budget 2017