Government takes its Budget for next year to MPs and includes anti-crisis measures

Of the planned 456 billion euros of spending for next year, the amount spent on social and welfare services, such as housing or education, will be the highest ever at almost 267 billion euros (not including 30 billion of EU funds), an increase of 23.6bn on this year.

The government said that with this surge in social spending it was aiming to ensure that pensioners did not lose spending power, to improve conditions for the working class and increase investment in health, education and dependency.

While giving first details of the Budget, the minister of finance, María Jesús Montero, said current free travel for regular users of local and medium-distance trains, which was meant to last until December this year, will be extended throughout the whole of 2023.

As well as helping users deal with the cost of living crisis, the free-travel measure aims to encourage more people to use public transport.

The scheme, which started in September, has been well received by the public, with up to 40 per cent more passengers travelling on the local Cercanías trains services nationally.

Other anti-crisis measures currently in force, such as reduced fuel prices, were not included as part of the Budget and the government will decide in November whether to extend them, Montero said.

Spanish state pensions are to rise in line with inflation next year, and an increase of 8.5% has been estimated, although the yearly inflation rate is not known for certain at present.

Defence spending is to rise also by 6.5%, which Montero said would be used to hike military salaries. Overall, defence will go up by 25.8% however when other factors are taken into account. The sum invested in healthcare is also to rise by 6.7%, with a specific allocation for primary healthcare and a 500-million-euro plan to improve infrastructure.

As well as extra money for housing (including affordable rentals), dependency, education and R+D+I, record resources have been assigned for the self-employed and for councils.

Other measures included in the Budget are an increase in unemployment payments, which will return to 60% of the base salary from the seventh month. This will average about 100 euros more and will benefit 300,000 people. The Partido Popular had reduced it to 50% when in government.

The child allowance of 100 euros a month, which until now has been paid to working mothers, is to be extended to all families with children up to three years of age, and single-parent families with two children will now count as a "numerous family" for benefits.

Like pensions, the minimum living wage is also to be increased in line with inflation.

The government also announced on Monday that it has slightly increased its growth forecast for this year to 4.4%, but has lowered the expected growth in 2023 to 2.1 per cent.

Ministers now face the challenge of getting the Budget approved by MPs in a few weeks' time. The vote will depend on some of the smaller Basque and Catalan nationalist parties.