The targets for the less discretionary items taken as a whole are in line with the estimates of the models used by the Banco de España. This is particularly so for pension expenditure (the behaviour of which is determined by the increases agreed for 2019 and population ageing), unemployment benefits (which depend mainly on the behaviour of unemployment) and interest in National Accounts terms (which reflects the behaviour of government debt and of interest rates). 2.2  Projected revenue in the Draft Budget  On the revenue side, a broad set of legislative changes is proposed, including notably an increase in personal income tax and in wealth tax at higher income levels, the establishment of a minimum rate of 15% of taxable income for large corporations, the limitation of double taxation exemptions, and an increase in hydrocarbons tax, focused on diesel. On official estimates, these changes would raise government revenue by some € billion in 2019. Also, the Draft Budget includes the new taxes on financial transactions and certain digital services, with an officially estimated impact on revenue of some € billion in 2019. The Draft Budget revenue projections are also affected by the introduction in July 2017 of the system known as “immediate supply of VAT information” (SII by its Spanish initials).
First, greater labour market efficiency, through lower temporary employment and improved employability, especially in the case of less skilled workers, could boost economic growth potential. Second, productivity gains thanks to investment in human capital, greater innovation and the elimination of inappropriate barriers to competition would also have beneficial effects on economic progress in the medium term. Before I close I would like to mention, among the structural challenges facing the Spanish economy, those facing the banking sector. Spanish banks do indeed still face challenges, such as reducing their volume of non-productive assets, improving their capital structure and profitability, strengthening their reputation and making optimum use of technological developments.