Italy kills off ‘wicked’ green initiative

The so-called Superbonus 110 program for climate-friendly renovations has been threatening public finances, officials say

The Italian government has scrapped a climate-friendly tax credit program, claiming it had cost more than €110 billion ($117 billion) and led to widespread fraud. According to Finance Minister Giancarlo Giorgetti, the “reckless policy” was a threat to public finances.

“We have decided to stop the effects of a wicked policy that has benefited a few citizens but has placed a burden on each of us from the cradle onwards of €2,000 ($2,132) per head,” Giorgetti told reporters on Thursday.

The so-called Superbonus 110 initiative, which was one of several programs aimed at reducing the environmental impact of properties, entitled homeowners to a tax credit of up to 110% on the cost of upgrading their home. Introduced after the Covid-19 lockdowns ended, the program has led to a surge in home renovations, boosting Italy’s economic activity.

However, the initiative has been criticized by former Prime Minister Mario Draghi, who called it “a system without checks” after it was revealed that $4.6 billion of fraud had been linked to the scheme.

The law ending the tax credit program specified that construction work that has already begun will continue.

Meanwhile, former Italian premier Giuseppe Conte, whose government introduced the Superbonus system in 2020, warned the move would deal “a fatal blow” to the construction sector. “We’re putting at risk 25,000 companies and 130,000 jobs,” he claimed.

The president of the ANCE national building association, Federica Brancaccio, echoed the warning, adding that if the government stopped the tax credits without coming up with a structural solution, then “thousands of companies will be permanently without liquidity and construction sites will stop completely, with serious consequences on families.”