The Superbonus has only produced +1 per cent of GDP in 2 years, says the Upb
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It is not true that the measure pays for itself as Giuseppe Conte says. The impact on growth was minimal, while in the same period it cost about 3 points of GDP in public spending. The report of the Parliamentary Budget Office
Among the smoke bombs of politics and the fireworks of stakeholders, who speak of phantasmagorical multipliers and double-digit effects on economic growth, it is difficult to orientate on the real economic impact of the Superbonus. Until recently, the narrative was that the 110 percent tax credit (the state pays for all the work and in addition loses another 10 percent) was a bargain not only for beneficiary companies and families, but also for the whole the community: because the Superbonus “pays for itself” and because “it has been a formidable driving force for economic growth, +10.7 percent in two years”, as the former prime minister has just said Joseph Conte.
The cost of the Superbonus and the Façade Bonus, clearly higher than the forecasts formulated in the technical reports of at least 50 billion euros, was made more evident in recent weeks by the intervention of Eurostat which forced the government to turn off the spending taps and stop the assignment of credits for the future. On the other hand, as regards the impact on the GDP of the construction incentive to disperse the smoke screen, the Parliamentary Budget Office (UPB), the independent Italian body that supervises public finance, has arrived. In a hearing in the Senate, as part of the fact-finding investigation on tax credits, the president of the UPB Lilia Cavallari provided an estimate of the contribution to growth of the Superbonus in the two-year post-Covid recovery period 2021-22 which is approximately 1 percentage point, i.e. on average +0.5 per cent per year. “According to Istat data – says the Upb – in the last two years the contribution to the growth of GDP from investments in residential construction was 2 percentage points. Using the macroeconometric model used by the UPB it is possible to reconstruct that half of the contribution would be directly attributable to the tax incentive”. So, 1 percentage point in two years. That is less than a tenth of the overall growth which was 10.7 percent.
In its analysis, the Upb writes that it is true that in the last two years the construction sector has grown at a sustained pace and higher than that of other European countries, but underlines how only a part of the expansion “is attributable to investments in housing, as the accumulation of non-residential constructions and public works that did not benefit from any incentive was also very pronounced”. Therefore, he underlines how residential investments in the two-year period 2021-22 “grew by around 43 billion, a very high value compared to historical dynamics, but lower than that of the complex of building subsidies in the same two-year period (in particular, the Superbonus, the bonus facades and the incentive for building renovations)”. According to President Cavallari, this indicates a possible crowding-out effect, i.e. a shift of investments from non-incentivised sectors to those that offered the Superbonus and therefore higher margins. Not only was the cumulative growth of investments in residential construction 43 billion – about half of the 80 billion credits from Superbonus and Façade Bonuses – but the growth of construction as a whole was half of half: 22 billion euros.
This substitution or crowding-out effect thus emerges from the PBO macroeconometric model according to which “compared to the contribution to GDP growth of investment in residential construction indicated by Istat for 2021-22 (2 percentage points), half would be attributable to the tax incentive”. Only +1 per cent of GDP in two years, which however cost about 3 points of GDP in public spending in the same period. In short, it was a very large part of a simple transfer of wealth from state coffers (i.e. from the pockets of all families) to the assets of the 3 percent of the lucky ones who renovated their homes and to the balance sheets of the companies that built the jobs.
The estimate of the Upb, presented to the senators by prof. Cavallari, may seem very simplistic, but it is moreover consistent with the econometric analysis made by the Bank of Italy, and always presented in the Senate hearing, according to which only “half of the investments that benefited from the Superbonus are of an additional nature, i.e. they would not have occurred in the absence of the incentive”. Apart from the declarations of politicians and the estimates of part of the builders, these are currently the only serious and independent analyses.
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