Antoine Costa (Ibiza, 1976) is Vice-President of the Balearic Government and Minister of Economy and Finance. In this interview, he declares himself very proud of the tax reduction achieved by the Executive that he presides over. Marga Prohens and assures that the big beneficiaries are the middle and lower classes and “not the rich as the left wants us to believe”. He announces new tax deductions and stresses that the regional Executive will be strongly committed to public transport, including the creation of new train lines. Antoni Costa also analyses the problems that have arisen with European funds due to the impossibility of executing the projects imposed by the various ministries within the deadlines.
Question: At the beginning of the summer, President Marga Prohens announced that she would not abandon any railway projects and that she was even considering new train lines.
Answer.-Yes, there are projects on the table. The left says that the government is not willing to invest in public transport and I think they are wrong. In the future, the government’s commitment to public transport will be perfectly visible, even if I cannot now advance projects that belong to other departments. The commitment to public transport is absolutely necessary.
Q.- Does this commitment to public transport involve the creation of new train lines?
A.-Yes. The commitment to public transport involves new railway lines.
Q.-What is your assessment of the tax cut? The left always insists that the cut only benefited the rich.
A.-The reality is different. In just over a year, more than 700 young people from the Balearic Islands under 30 or people with disabilities have bought their first habitual residence, paying zero euros in property transfer tax. When the left talks about the rich, perhaps they are referring to those young people under 30 who have bought their first habitual home? In addition, a very large number of people under 36, large families or single parents have paid half of what they paid to the left-wing government in transfer tax when buying their first habitual residence. These are young people from the middle class of the Balearic Islands, they are not rich people.
Q.-And what about inheritance tax?
A.-Many citizens of the Balearic Islands have received an inheritance from their parents or grandparents and have not paid a single euro in inheritance tax. Our statistics show that only fifteen citizens have received inheritances worth more than one million euros. I admit that these citizens are wealthy, but there are also the 6,000 people who have benefited from the abolition of the tax and who belong to the working and middle classes. I believe that the left is being deeply demagogic on this issue. I would also like to highlight the deductions at birth. Here we are not talking about wealthy parents because the income ceiling is currently 33,000 euros, which corresponds to the income of 80% of citizens of the Balearic Islands. The tax reform carried out by the Balearic People’s Party directly affects middle and low incomes. We are deeply proud of the tax reform that we have carried out.
Q.- Will there be more tax cuts in 2025?
A.-Well, the policy of tax reduction is an innate policy of the Popular Party. We have it in our blood and we have proven it. We have reduced taxes. We have already carried out a large part of the tax reform that we promised. We promised to eliminate inheritance and gift taxes and it took us ten days to do it since we began governing. We said that we would eliminate the wealth tax and we eliminated it to the limit that the central government allowed us. We said that we would carry out a tax reform of transfer taxes to try to facilitate access to housing for citizens of the Balearic Islands and we have also done so. In the decree-law on administrative simplification, we have created four deductions that I find very interesting. It is true that they are already regulated in the budget law but we are going to make more precise regulations. We have presented an amendment to the Decree-Law on a deduction for landlords of housing in the Balearic Islands of up to 1,500 euros to facilitate the incorporation of housing in the rental market. A new deduction is also included in the personal income tax for expenses related to residences, day centres and hiring people to look after the elderly or disabled. Well, this is also another new deduction that we are going to create. These are all deductions from the personal income tax. We have also created a new deduction for ALS patients of up to 3,500 euros per year. Let us also mention the deductions for very difficult positions to fill that will benefit the civil servants of the State of the Autonomous Community, especially the National Police and the Civil Guard, to try to make them stay on the islands.
Q.- What about European funds? Do you have to return money and pay interest on top of that?
A.-From the beginning, while we were in opposition, we criticised the fact that European funds were granted by the ministries in a deeply interventionist, rigid and fiscal manner. The rigidity is such, the taxation is such that the execution of the funds in the Balearic Islands is impossible. And this has not only affected this government, but also the previous left-wing government. We have asked for flexibility to be able to adapt the European funds, because the situation in the Balearic Islands has nothing to do with that of Galicia, for example. They send us European funds telling us what to do and, what’s more, that it has to be done in six months. And when we tell the ministry in question that such a project is not interesting and that it cannot be carried out in six months, they send us the money and we have no choice but to return it. We have raised this problem at the various sectoral conferences but the central government ignores it. Sometimes I have the impression that a ministry imposes so many restrictions with the desire that the money be returned. I tell you this sincerely, because otherwise it will not be understood. It is not understood that, when it comes to a very general request from all the autonomous communities, there is no response in the form of flexibility in the criteria from the different ministries.
Q.- And then you have to pay interest.
A.-Indeed. This is another consequence that we have also pointed out to the Ministry. How is it possible that I tell you that I cannot carry out the project, that you return the money and on top of that you have to pay interest? The Kingdom of Spain does not have to pay interest on returns to Brussels.
Q.-From what I see, European funds are not reaching companies, the private sector.
A.-European funds do not reach the private sector and, therefore, the ultimate goal of economic transformation aimed at by European funds is not achieved. We have said this from the first minute. And this economic transformation is not happening because of the rigidity that prevails in the management of these European funds. I would like to highlight another question: has anyone asked the State how the Strategic Projects for Recovery and Economic Transformation, the LOSSES, are being carried out? I say this because the LOSSES managed directly by the State have a minimum level of execution. It turns out that the rigidity of European funds even affects the State.
Q.- Throughout the summer, there has been a lot of talk about tourist saturation. What approach are you taking in this regard?
A.-Since the beginning of the legislature, we have detected a clear social concern, namely that after the creation of 115,000 new tourist sites by the previous government, the citizens of the Balearic Islands have begun to perceive a phenomenon of congestion that was not so pronounced. years ago. And this social concern cannot be ignored. The government cannot and does not want to look the other way. Traffic jams at certain times of the year have increased considerably. There is a clear concern on the part of society and that is why we have decided to create the Table for a Social and Political Pact for Sustainability in the Balearic Islands. The economy of the Balearic Islands has grown a lot, but it has grown a lot in volume and number, which has led to sustainability problems in other areas, to problems of social sustainability of our economic model and to problems of environmental sustainability of this economic model. Therefore, the decision taken by President Prohens is to seek a broad consensus that allows us to make decisions for the future. This government is willing to make the decisions that arise from the consensus of the Table for the Social and Political Pact for Sustainability.
Q.- Are you in favour of setting limits?
A.-Set limits on the growth of volumes. Setting limits on growth is not the same as degrowth. We do not know where degrowth can lead us. It is one thing to talk about degrowth as the left says, but another thing is to recognize that we cannot continue to grow at the rate we have grown so far. We cannot do it because the surface area of the Balearic Islands is what it is.
Q.-For years there has been talk of the need to diversify the economy of the Balearic Islands, but it seems that there is no progress in this area.
A.-I want to make one thing very clear: in the Balearic Islands we are good at tourism, we are world leaders. It would be absurd to think that, when we are very good and we do what we do, someone now comes along and says that what we have to do is something else. It would be really crazy to consider the possibility of changing the model. The future of the Balearic Islands is that of tourism and this Government is not going to bet on a change of model. This Government is going to bet on a transformation of the model, which is not the same.
