Spain's minority government presented Friday its long-delayed draft budget for 2017 which boosts social spending and moves away from austerity in a bid to win opposition support for the spending plans.
Budget Minister Cristobal Montoro said the budget would "fuel growth and employment" while at the same time allowing Spain to meet the deficit targets agreed with the European Union.
The spending plan slashes the value added tax slapped on live shows such as concerts and theatre performances from 21 percent to 10 percent and boosts funding for programmes to aid youths and the unemployed.
It is the first budget without major cutbacks since Spain was plunged into an economic crisis in 2008 when a decade-long property boom finally turned to bust, throwing millions of people out of work and causing its public debt to soar.
The 2017 budget was put on hold after two inconclusive elections left the country without a functioning government for nearly a year.
It is based on a prediction that the Spanish economy, the euro zone's fourth largest, will expand by 2.5 percent in 2017 while the unemployment rate will drop to 16.6 percent from 18.6 percent last year, which will reduce spending on unemployment benefits and increase tax revenues.
The government predicts the public deficit will fall to 3.1 percent of economic output from 4.5 percent last year.
"These are prudent forecasts," Spanish Economy Minister Luis de Guindos told a news conference.
The Spanish economy grew by 3.2 percent last year, one of the fastest rates in Europe, boosted by a booming tourism sector and low petrol prices.
Parliament is expected to vote on the draft budget at the end of May. The budget vote will be a key test for Prime Minister Mariano Rajoy's conservative government, which was sworn in for a second term in October without a majority in parliament.
Rajoy's Popular Party has 137 seats in the 350-seat parliament and will need the support of other parties to get the 176 votes it needs to pass the budget into law.