A series of cuts have already been introduced such as the slimming down of the administration and the number of director general and quangos created by the former left-wing coalition, but now Bauzá is looking to the mid-term.
The Balearic Finance Minister, Josep Ignasi Aguilo explained after the meeting broke up that all nonessential subsidies are going to be eliminated from next year's budget.
The only areas that will receive government cash funding are going to be health, education and social policies, the areas considered most important by Bauzá's centre-right government.
The President also revealed a new law to help small and emerging businesses is also going to be put to parliament and this received the full support of the small business sector. This is a new step forward, it's a new strategy and we hope that by doing away with the culture of subsidies, we develop a culture of creation and social dedication, Aguilo explained.
We want a productive economy with private incentives fuelling a willingness for people to learn and go into business, he added.
We've had to change direction in order to revive the economy, improve people's well being and reduce the deficit, the Finance Minister underlined.
Central government simultaneously announced further austerity measures on Friday while also unveiling a halving of sales tax on house purchases as it seeks to strike a balance between cutting its deficit and stimulating anaemic economic growth. The 5 billion euros of savings to reduce the deficit aim to fend off debt market attacks. However, the government steered clear of drastic cuts that could damage the ruling Socialists' chances in November's general election.
Moves to cut drug costs for regional governments with a new bill on generic medicines will save 2.4 billion euros annually and a further 2.5 billion euros will be saved this year by front-loading tax payments from large businesses.
The tax measures, which will see large businesses pay higher tax rates until 2013, will help the government hit its target of a 3 percent gross domestic product public deficit (GDP) in that year. Companies will return to their normal tax payment schedule in 2014 and will pay lower taxes from that time.
In no way will this lead to increases in tax, just changes in the time tabling of tax income, the Economy Ministry said in a statement.
The opposition Partido Popular called the change to tax payments an accounting fudge.
The government said the measures would make it easier for Spain to hit its deficit targets this year as it battles to avoid being dragged into a euro zone debt crisis which has pushed borrowing costs to record levels.