Over half of the package, worth some €30 billion (US$31 billion), is devoted to cuts to tax and social security contributions for low- and middle-income earners.

Rome is having to perform a fine fiscal balancing act, after Brussels took Italy to task earlier this year over its debt worth nearly €3 trillion, the second highest as a proportion of gross domestic product (GDP) in the EU.

Meloni’s hard-right coalition has committed to reducing the public deficit to 3.3% of GDP in 2025, down from an expected 3.8% this year.

But, the budget comes amid slowing growth, with the ISTAT national statistics office estimating GDP this year to increase just 0.5% – half what it forecast in June.

The measures approved include making permanent a merging of the lower two income tax brackets, so people earning €28,000 a year can pay 23% instead of 25%.

The budget expands the number of people eligible for a reduction of social or tax charges.

Meloni’s far-right Brothers of Italy party is also trying to boost Italy’s flagging birth rate, and the budget allocates a €1,000 bonus per newborn for families earning up to €40,000 a year.

Environmental associations have complained there is little for tackling man-made climate change, though Rome is scrapping a bonus for gas-fired boilers, under pressure from Brussels.

Instead, buyers of energy-efficient household appliances will be eligible for a bonus of up to €100 – rising to €200 for households earning under €25,000.

Companies that boost hiring and reinvest part of their profits will be able to benefit from a reduction in the corporate tax rate, which drops from 24% to 20%.

This new measure is partly financed by Italy’s banking sector, which has been asked to contribute a total of €3.4 billion for the 2025 and 2026 budgets.

They have agreed to postpone tax credits for these two years to provide liquidity to the Italian state, which should repay them later.