Meloni cabinet signs off on €26 billion package, funded partly by a levy on banks and insurers, as the bill heads to parliament.Italy’s cabinet approved the draft 2027 budget law on Wednesday, a package worth around €26 billion, in the fifth "manovra" of Giorgia Meloni's right-wing coalition.   The bill must now go to the chamber of deputies, where amendments are possible, news agency ANSA reports.   It was approved after the government missed the non-binding 20 October deadline for sending it to parliament, according to newspaper Domani. The delay was attributed to limited resources, competing demands from coalition parties and talks with the European Commission on spending flexibility. Tax and car measures The threshold for the second income tax band, taxed at 33 per cent, will rise to €55,000 a year. Meloni said the maximum benefit would be €500 a year, at a cost of €1.2 billion. The ceiling for the flat tax regime for the self-employed will go up from €85,000 to €100,000.   The car tax (bollo auto) exemption for vehicles up to 80 kilowatts, and for motorbikes, will become permanent. Meloni said this covers about 70 per cent of vehicles on the road. The exemption had previously applied only for 2027. Families and housing A newborn fund will see the state pay €100 a year into a pension savings account for each child born from 2027 until they turn 18. The measure was proposed by economy minister Giancarlo Giorgetti.   Parental leave will increase by one month for parents. For second children, the months paid at 80 per cent of salary will rise to five, and for third and subsequent children to six.   The “mothers’ bonus” of up to €720 a year will be extended.   A €300 social voucher will go to people over 75 with a pension of up to €28,000 a year, covering about 5.5 million people at a cost of €1.6 billion. The flat-rate tax on rental income for agreed-rent contracts will fall from 10 per cent to 5 per cent, and to 1 per cent for tenants aged 35 or under. Building renovation tax breaks are expected to be extended, but this reportedly depends on talks with Brussels over the EU’s energy safeguard clause, according to Domani. Without a corrective measure, the deduction for main homes would drop from 50 per cent to 36 per cent in January. Part of the energy fund will be used to install air conditioning and heat pumps in schools. How it is funded Meloni said about €5 billion would come from the financial sector. Banks and insurers will be asked to contribute, with an exemption threshold of €90,000 for smaller and cooperative banks, along with a higher financial transactions (Tobin) tax. Further revenue will come from: an extra levy of around €700 million on energy companies; another €700 million from the gaming sector; cuts to ministry budgets of around €1 billion, according to Meloni.   The prime minister said there had been “no room to reach a prior agreement” with the financial sector, which she thanked for its understanding, ANSA reported. She added that the budget was “not against anyone” and that the state was setting an example with its own cuts. Giorgetti called it a “serious” budget and said he hoped parliament would stay on course.   The Italian Banking Association (ABI) has opposed the levy, noting that it reached a deal with the government in 2025 to pay €10 billion over three years, according to Domani. Deputy premier and Lega leader, Matteo Salvini, has been pushing hardest for a tax on banks’ extra profits. Energy decree A decree aimed at cutting electricity and gas costs was on the cabinet’s agenda but, according to newspaper Il Sole 24 Ore, it was postponed to allow for technical changes. The cabinet also examined legislative decrees on reforming the craft sector and on rules for outdoor seating areas. Photo credit: Marco Iacobucci Epp / Shutterstock.com