Rome, Oct 16 (IANS): The Italian cabinet has outlined the 2016 budget proposal with expansionary measures aimed at boosting domestic consumption and economic recovery.

The 27 billion euros ($30.7 billion) plan, outlined on Thursday, needs to be approved by parliament by the end of the year, Xinhua news agency reported.

The proposal was sent to the European Union (EU) Commission, which is in charge of assessing national budgets of EU countries to check if they comply with EU fiscal rules.

The EU executive body might demand that Italy make some changes in the draft before it is adopted.

A key measure was the abolition of a controversial property tax on primary residencies, Prime Minister Matteo Renzi and Economy Minister Pier Carlo Padoan explained at a press conference after the cabinet's meeting.

The 2016 budget would also introduce tax cuts on agricultural equipment and farm buildings, a decrease in levies on municipal services, and a tax-break for companies investing in new machinery.

Renzi said an expansionary budget was needed to stimulate consumption and strengthen Italy's economy, which recently showed signs of recovery after a three-year-long recession.

"Not only are taxes not being raised, they are decreasing instead," he said.

The public spending review would amount to five billion euros only, half of the 10 billion euros the cabinet had set as a goal in recent months, the prime minister said on Thursday.

This might be a point of disagreement during the possible negotiations with EU authorities on the budget plan in the next weeks.

The abolition of the housing tax might also come under EU scrutiny, since the EU Commission had suggested that Italy increase taxes on property and cut those on labour instead, in order to boost growth and create more jobs.