Italy's conservative government won Tuesday final parliamentary approval for its new budget plan, including cuts to state spending of more than 25 billion euros (39 billion euros) by 2011, dpa reported.
In a confidence vote called by the government to speed up the process and prevent amendments, parliament's lower house Chamber of Deputies approved the budget with 312 votes for and 239 against.
Prime Minister Silvio Berlusconi's government last week relied on another confidence vote to pass the budget in the upper house Senate.
Devised by Economy Minister Giulio Tremonti, the budget plan includes cuts to health, education, security and local government spending in an effort to reduce the deficit.
Tremonti aims to cut the budget deficit to 1 per cent of GDP in 2010 from a targeted 2.5 per cent of GDP this year.
"This budget offers a guarantee that the government will not put its hands in (ordinary) Italians' pockets over the next three years," Berlusconi's spokesman, Paolo Bonaiuti, said ahead of Tuesday's vote.
Berlusconi, who swept to power in elections in April, promised he would not increase taxes, something which the previous centre-left government was accused of doing.
"We agree with Tremonti's analysis that expenses must be reduced, but these cuts have targeted the weakest (part of the population) and the welfare state," the leader of the centre-left Italy of Values party, Antonio Di Pietro said.
Included in the budget is the so-called "Robin Hood Tax" - named after the legendary English hero who stole from the rich to give to the poor - targeting petroleum, banking and insurance companies which Tremonti says have prospered in recent years, despite Italy's economic woes.
The country's central Bank of Italy recently more than halved its economic growth forecast for this year and next year to just 0.4 per cent, citing the worsening global outlook.