As with every new year we have new budgets to contend with, and with new budgets means toe price of some things goes up, whilst others (not many) go down.
This year starts with increases in the cost of electricity, fuel, stamps, telephones and regional train tickets, although the price of natural gas will go down. Airport taxes and other train ticket prices are maintained, as is IBI, the tax rate, although the basic minimum wage has also gone up, as have pensions. Keep reading to find out all about it, be patient though, we have a very technical bit to get through first.
The Consumer Price Index (CPI) ended 2018 with an increase of 1.2%, according to the advanced data presented by the National Statistics Institute (INE), below the rise in the salaries of public employees this year (+ 1.75%) and the increase in pensions, finally fixed in 1.7%, with the consequent gains in purchasing power in both groups, although it is below the salary increase agreed.
In 2019, with a forecast of the CPI of 1.2%, the salaries of civil servants will rise by at least 2.25%, to which another 0.25% can be added as a function of Gross Domestic Product (GDP), together with a rise of 22.3% of the salario mínimo interprofesional (SMI), which will increase to 900 euro per month in 14 payments.
That’s the technical stuff and we think we have finished with all the abbreviations now, so we can get on with just explaining the ups and down now.
FUEL FOR THOUGHT
You may have already noticed the continual reduction in the cost of fuel for your car, now, mainly due to the drop in the prices of the raw material, with a barrel of crude installed around the $53 and in a downward spiral from the past month of October, we will see motor fuel prices drop again..
In fact, we closed 2018 with a relatively low price per litre of 1.211 euro for petrol and 1.163 euro for diesel, although we will have to contend with the increase in tax on diesel this year.
In the case of domestic electricity, the regulated part of the bill (which represents around 41% of the invoice) will be frozen for 2019 for the fifth consecutive year, so that the evolution of the invoice will depend on the behaviour of the wholesale market, known as ‘pool’, which affects in the region of more than a third of the receipt.
However, 2018 closed with a higher than average price in the pool, at 57 euro per megawatt hour (MWh), the highest in the last decade. Apologies for having to throw in yet another abbreviation.
Thus, the electricity bill closed 2018 with a year-on-year increase of more than 2%, despite the measures adopted last October by the Government, such as the temporary suspension of two of the taxes incurred by electricity companies, with one in particular being a 7% tax on the generation of electricity, in an attempt to keep the bills under control.
Meanwhile, the natural gas tariff, which will also see its tolls frozen, will result in domestic consumers seeing a 4.6% reduction in January on average, compared to the last quarter of the year.
Then we have our old favourite, the bottle of butane gas. At the end of 2018, the standard price stood at 15.33 euro per bottle, after having risen 4.93% in November, but we will have to wait until the middle of the month to see if it goes up for the fourth consecutive month or not.
The Movistar network announced that it will increase the prices of monthly fees for fixed and mobile products, as well as extra consumption, such as text messages or call setup, and additional services. In addition, Vodafone and Orange are expected to follow, but have not yet revealed any increase.
We still have to wait for some elements of the 2019 budget to be approved, but if the tax changes go through, one key change is an increase in Personal Income Tax for very high income earners, and a minimum tax of 15% for companies, as well as a 1% increase in Equity for fortunes of more than 10 million, so that’s us screwed then (that’s just a joke).
There is some good tax news, as VAT will be reduced from 10% to 4% for feminine hygiene products and from 21% to 10% for veterinary services, while the new taxes on digital services and the creation of the tax on financial transactions are pending approval, as well as the new diesel tax mentioned earlier.
In terms of housing, the forecasts of the main real estate portals point to a rise in prices for both the purchase and rental of property. Some industry experts are seeing prices increase by between 5% and 6%. As for the Euribor, it closed December at -0.13% and the experts believe that the upward trend will continue and the rise will be progressive in the long term, although it is not certain that it will return to the positive terrain.
In addition, the Government has approved the update of coefficients of the cadastral values for 2019, which will involve 1,179 municipalities, which will affect the tax on property (IBI). The update results in an aggregate average decrease of 1.92% of the cadastral value.
TRANSPORT UPS AND DOWNS
If you’re a frequent train traveller in Spain, the good news is that Renfe will freeze the prices of the Cercanías tickets for the fourth consecutive year, but the bad news is that the average distance trains (regional) will increase by 3.5% and Avant services increase by 7%. The high speed trains, AVE (okay, we’ll do this the other way, it means, Alta Velocidad Española) and long distance trains will not see their prices increase, or, according to the operator, not yet, but maybe later in the year.
Motorway tolls will go up and down, depending on where they are and, in particular, who operates the road. On average, the network run by the General State Administration has already risen 1.67% as of January 1.
However, in the case of the nine motorways that went bankrupt during the crisis and were rescued by the state, the price of the toll will drop an average of 30% from the middle of the month, and, how’s this for a free ride, will be free at dawn, between midnight and 06:00.
However, it is only the ones we describe here, so don’t just go crashing through any old toll booth. In fact there are a total of nine routes. The four Madrid ring roads, the AP-41 Madrid-Toledo, the M-12 Airport Axis, the AP-36 Ocaña-La Roda, the stretch of the AP-7 between Cartagena and Vera and the of Alicante ring road (that is NOT the La Zenia toll. That’s why you have to be careful).
COME FLY WITH ME
You’re probably getting a bit bored now, pretty much like a flight from the Canaries to the UK. Well consider this to be the jolt to wake you from the annoying kid sat behind kicking your seat. Wake up and keep going. You’ll reach the end soon.
Aena’s airport rates for 2019 will remain frozen globally, after the 2.2% reduction applied in 2018, from March 1 when it enters into force, with the start of the high season of air transport. You might think that it doesn’t affect you as you don’t own an Airbus, but it does, because that’s what keeps flight prices down.
However, the parameters to determine the average annual income per passenger have been revised downwards, following the report from the CNMC (oh what? More? I thought we’d finished with all that. Okay, last one, it’s the competition and monopolies commission, or the Comisión Nacional de los Mercados y la Competencia, to give it the full title), which has been set at 10.43 euro in 2019.
The Airport Regulation Document (DORA) (just Google it, but it’s nothing to do with the explorer girl) for 2017-2021, contemplates a reduction of 11% in Aena rates and guarantees that they cannot be raised until 2025, opening the door, in any case, to new reductions.
To this is added, the 12% reduction in air navigation rates in 2019, collected in the ‘Flight Plan 2020’ of ENAIRE (not even bothering), which will that the entity, which is in fact the air navigation management service, will no longer have to pay 100 million euro. This measure after the 3% reduction applied in 2018 will compensate for the higher than expected increase in air traffic.
On the other hand, the subsidy of the price of air and sea transport tickets for residents of non-peninsular territories is maintained at 75%.
SEND A LETTER MISS JONES
I promise, this is the end, and we’ve saved the best until last. Actually, that bit isn’t true, we just went through the budget documents in order. Anyway, it’s bad news, so it can’t be the best bit. Postage rates are going up 9%
Although the post offices didn’t open on New Year’s day. Actually, whilst we’re on the subject, the main post office in Torrevieja didn’t open on Christmas Eve or New Year’s Eve either, and I for one had a parcel to collect, so I wasn’t happy one bit, nor were any of the other people wanting their Christmas goodies. Anyway, I digress, and I did say we’re nearly at the end, so I’ll forget my moans and just get on with is.
The cost of a normal letter, or, in other words, the shipment of letters and normalised post cards of up to twenty grams of weight to national destinations has risen by 9% on January 1, 2019, so that it will cost 0.60 euro, compared to 0.55 euro last year (it seems so odd to say that don’t you think?)
The good news is that this increase is lower than the 10% we saw at the dawn of 2018, but the bad news is that it makes the postal rate one of the highest there is. Of course, we all known how exceptional the postal system is and so I’m sure we will be more than happy to pay this increase as the service is second to none.
We have now reached the end of our tether, if you have managed to read all of it to the end, we commend you. We only do it because we have to. I am going to write to the Queen and suggest a knighthood for you next year. If you just skipped through, then you cheated, so no knighthood for you. Any complaints, send a letter… Kerching!