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Figure 1 - Expenditure Policies – 2005 Public Budget (Percentage change 2004)

6.0 7.0

9.1

25.4

6.2

9.5

5.6

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Education Infrastructure Public

services

Total

expenditure

3. Policy priorities with higher impact on productivity

Employment creation

Employment creation is one of the main economic policy objectives for the new government. In 2005,
public expenditure devoted to labour market active policies will increase by 7% in respect to previous
assignments. There are three key objectives in the area:

• To reduce temporary contracts;


• To facilitate job seeking, by ameliorating Public Job Agencies, making them more efficient;


• To improve workers formation by fostering education and live-long learning activities.

R&D&I

The objectives of the Spanish R&D&I policy are to reinforce the resources allocated to this area,
optimise their use, and improve interaction among the science-technology-business system’s actors with
the general objective of attaining the EU average in the medium term. The commitment to reinforce
R&D&I is illustrated by General State Budget for 2005, where the research allocation increases by
16,3% with respect to the previous year and by 25,4% when excluding military research. A significant
portion of this increase will be in the form of soft loans for R&D&I. It pursues the following strategic
objectives:

• Strengthen public sector’s role in generating fundamental knowledge and foster the internalisation
  process of the Spanish scientific system;


• Improve the standards of the system by increasing human resources and quality in the public and
  private sector.


• To achieve these objectives, the highest increases in budget allocations are concentrated in
  scientific coordination, health, telecommunications, industry, energy and environment, fishing,
  oceanography and astrophysics.

Infrastructure

The public sector’s investment efforts in physical capital focuses on investment in infrastructure, whose
allocation is 9.1 % higher than in 2004. The priority here is to increase factor productivity and mobility,
stimulate private investment and foster social and regional cohesion, while maintaining infrastructure