Balearic Residents' Discount may be capped.

Balearic Residents' Discount may be capped.

02-08-2020Gemma Andreu

The 75% Balearic residents’ discount may be capped or eliminated altogether if the Independent Authority for Fiscal Responsibility, or AIReF proposed are adopted.

AIReF has offered three scenarios, one of which is to limit the number of subsidised flights residents can take and force people to pay full price fares when they reach the maximum.

AIReF, which is chaired by Cristina Herrero, monitors the spending behaviour of the Government and Regional Executives and makes proposals to improve efficiency.

The Government requested a study of the 75% residents’ discount after Ministry of Transport spending soared from 324 million euros a year to 720 million euros when the discount rose from 50% to 75%. The study acknowledges that the personal Income Tax data of travellers is being checked to determine whether the system is being abused.

AIReF's report confirms that costs skyrocketed when the subsidy was increased and that almost half of the population of the Islands doesn’t benefit from the discount fares.

Subsidies

This implies that some residents of the Islands are accumulating more than 357.4 euros per year in subsidies while others get nothing.

The AIReF report offers three solutions: a fixed fee, a limit to the number of subsidised flights per year or an annual fixed subsidy that dwindles as trips are made.

It also estimates that by limiting the number of flights to the Peninsula where residents' discount can be applied, savings would amount to 26.4% for a maximum of 10 subsidised flights per year compared to 5% for 50 flights.

By limiting Inter-Island flights savings would amount to 23% for a maximum of 10 subsidised flights compared to 3% for 50 flights.

Another proposal from AIReF is to limit the total subsidy amount per person per year, which it claims would persuade residents to look for the cheapest flights.

A maximum subsidy of 500 euros a year would save the Government 21.2% on flights to the Peninsula and a maximum subsidy of 2,500 euros, would save the Government 1.7%, according to the report.

If the Government does decide to change the discount subsidy it would have to modify the Law of Special Regime of the Balearic Islands, or REIB.

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RBMM / Hace about 1 month

The discount is also used by lots of non-residents who have NIE and padron because they rent or own a home here. They are not residents in Spain, but they nevertheless benefit from the discount.

+1-

Harry / Hace about 1 month

Stan, sorry I don’t agree. When this discount was originallly introduced only Spanish residents or tax payers could benefit from same. Some bright spark complained to the EU as they considered it to be “discriminatory”. The EU agreed, so now anyone who resides in the islands, wherever they came from can now benefit from it, doesn’t matter how long you have lived here.

+2-

James / Hace about 1 month

Spain was thriving before Covid-19, and this coalition of government. Its to far left in its political views its surely only going destroy this country and economy with its socialist communists views and agenda. Bit by bit our choices are been taking away and a set of rules are put in place. George Orwell Animal Farm is a great example of this.

+0-

Colin Allcars / Hace about 1 month

It will be interesting to see what effect scrapping, or drastically reducing, the travel discount will have on the already heavily under siege Spanish airlines and ferry operators.

+4-

donna / Hace about 1 month

yes give them the discount. then watch the virus spread. than go crying cap in hand to the EU. it would be funny if ti wasn't pathetic. banana republic.

+-3-

Stan / Hace about 1 month

The simple way to solve the dicounting facility , is to scrap it completely. Then there can be NO complaints. NO further problems. Totally eliminated.

+5-

Alan / Hace about 1 month

That didn't take long, just let us see what is next to raise taxes and make the people pay more for this lock down and the hidden unemployment rates along with the extreme decline in GDP. Someone has to pay for the ERTE it's not free. the part is interesting in this article it mentions '' saving the government'', don't you mean the tax payers ? Governments only spend tax payers money they don't contribute. I have faith the human population and race will stand up to governments and take back control they are slowly losing and right being eroded.

+14-

Anton Barkhuysen / Hace about 1 month

Surprised no-one has suggested using the tourist tax to subsidize the discount. Yet---

+11-