Presentation on theme: "Some budgetary measures taken under the crisis. A gender perspective Paloma de Villota."— Presentation transcript:
Some budgetary measures taken under the crisis. A gender perspective Paloma de Villota
Welfare systems Nordic …………... High tax revenue as percentage of GDP Continental……… High/medium tax revenue as % of GDP Liberal …………… Low tax revenue as % of GDP Mediterranean ….. Low tax revenue as % of GDP
Different levels of fiscal pressure in the OECD according to the chosen social model
From Spanish Employent Action Plan 2004 8: Make Employment affordable […] “Activity rate, employment rate, unemploymente rate. fiscal regimes and social security systems should be transformed……to stimulate women´s employment
Fiscal reform on income tax was considered very positive by conservative Government to reduce the tax burdens for workers Reducing the first bracket for lower income workers but also those with higher incomes The gender effect was not gender neutral
Fuente: elaboración propia a partir de la Muestra AEAT-IEF IRPF 2004 (941.029 declaraciones extraídas por muestreo estratificado aleatorio)
¿Do you consider the amount of taxes as too high, about right or too little? Source: Own elaboration, Survey “Public Opinion and Fiscal Policy, XXVI”, Centro de Investigaciones Sociológicas, CIS, 2009
Perceptions of Taxes paid, by sex Source: Own elaboration, Survey “Public Opinion and Fiscal Policy, XXVI”, Centro de Investigaciones Sociológicas, CIS, 2009
In year 2008, General Election took place were promising (socialist party and conservative party) to reduce tax burden….) R.D (Law) 2008, 21rst of april stablished a tax allowence since 1rst of january of 2008 “ until 400 euros per year” for those working on the labour market As consquence of the economic crisis the State Public Budget for year 2010 abolished this measure and its impact is not gender neutral because proportionally more women than men have been afected as their incomes are lower than men.For example, workers with wages of 12.500 euros per year will be reduced their disposal income by 3,2%, but those earning 250.000 euros only would be affected by a reduction of 1,6%.
State Budget for year 2011 increase a liitle bit the effort for highere labour incomes increasing again the top bracket from 43% and from 44% to 45%, for those work incomes higher ( 120.000 y 175.000 euros, respectively). In year 2006 Socialist Party reduce the top bracket form 45%, to 43 % for those earning incomes of 60.000 euros or more.
Economic Crisis reduced Corporate Tax Tax rate decreases from 30 to 25% for medium and small business
The crisis impacts on 2010 budget when VAT was increased General rate from 16 to 18% Reduced rate from 7 to 8%
Labour market Evolution of employment and unemployment rates
It is possible to appreciate the improvement of Spanish women entering on the labour market, as their employment rate has increased more than 34 percentage points from year 1994 until 2008, the date when the crisis starts to hit the Spanish economy. In that year. This is a positive aspect that has to be underlined because it clearly allows women to increase their share in labour income.
Men (1)Women (1) 199420052006200720082009199420052006200720082009 Employment/population ratio: Canada73,076,776,877,2 74,061,168,369,070,1 69,1 Spain63,376,477,377,474,667,531,551,954,055,556,753,5 OECD (weighted average)75,475,075,675,975,873,252,755,956,757,257,856,5 Labour force participation ratio: Canada82,082,582,282,582,781,867,873,173,574,374,4 Spain78,582,282,582,783,082,246,359,161,162,364,165,7 OECD (weighted average)81,480,280,4 80,257,560,260,760,961,461,3 Unemployment rate: Canada11,07,16,66,46,79,69,86,56,15,7 7,1 Spain19,47,16,4 10,117,831,812,211,610,913,118,5 OECD (weighted average)7,46,56,05,66,08,78,47,16,66,06,27,8 (1) Aged 15-64 years in Canada and aged 16-64 in Spain Source: OECD Employment Outlook 2010, p. 272 and 273. Paris 2010 Employment/population ratio and unemployment rate in Canada and Spain (percentages)
Even though, comparing all the OCDE countries, Spain has a differential and negative characteristic to be pointed out related to women´s unemployment level. The figures included above easily show that during some years, as 2006 for instance, women´s unemployment rate doubled that of Spanish men´s. In any case the situation in the year 1994 was appalling considering the unemployment rate that was over 30% ( 31%). This figure doubled the percentage of those countries from Eastern Europe which were under structural adjustment public policies as they were in transition from socialist economies and political regimes into democracies and market economies like Slovak Republic, Poland or Hungary (see annex).
Considering the huge proportion of women unemployed in Spain, it is more precise to compare any country and Spain referring to the employment rate instead of labour force participation rate, or activity rate whose figures are also shown in the table above. The reason is due to the fact that this ratio includes all actives and in consequence also the unemployed. For this reason, the activity rate, in our opinion, could disguise the true situation of women on the Spanish labour market, when data included those who are not really in paid employment as they are just trying actively to find a job, independently of whether they have any purchasing power or not (depending on whether they are receiving or not unemployment benefits).
Law (Real Decreto-ley 9/2008, november 28th), stablished the State Fund for Local Investiment with 8.000 millions of euros, for public works at local level That supposes a keynesian estimules to stop the employment detruction ( after speculaitive bubble). This public investiment supposed 0,8% of GDP) for year 2009. Three objetives: a)To avoid job destruction after the construction sector bable bursted; b)To help small companies depending on building sector to survive after the crisis of the construction sector, affecting much more men than women; c)To improve local infraestructures.
The Law ( Real Decreto-ley) 13/2009, 23rd october, stablished the Fund for Employment and Local Sustainability, with 5.000 millions of euros for year 2010. Any fiscal legal measures had an evaluation on gender impact because the emergency and lack of time of the situation allows the Goverment to ignore this legal prescription.
Alarcón and Colino (2011) studied the gender-oriented assessment on Spain’s State Fund of Local Investment 2009 (FEIL-9), a policy developed throughout 2009, whose purpose was to finance public infrastructure projects managed by municipalities. They analyzed only two chapters of FEIL-2009, related to children's kindergartens and sports buildings but further studies are required. They try to point out if these kind of policies have really had the ability to generate any structural change in social behavior.
The total Fund was divided among 8.111 local goverments according their number of inhabitants. There were two special chapters: Social installations Infraestructures:water supply, lighting, etc.
Local distribution of public expenditures financed by FEIL-2009 Source: Alarcón, G. and Colino, J.
The information supplied by data proceeding from sports federations shows differences by gender. For example women´s participation is higher in volleyball (72,1%) and in swimming (43,7% ), track and field (39,5%), basketball (33,3%), tennis (29,4%), etc. Whereas football, which only has a percentage of less than 4% (3,8%), has received in the year 2009 the highest amount of funds after sports complexes, as is shown in the table below.
FEI-2009 expenditure in sport infrastructure. Public local investment, by CCAA Headings of the table: Sports Complexes – Tennis and paddle courts and Basque pelota court -Football pitches - Swimming pools - Others Source.- Alarcón, G. and Colino, J.
Alarcón and Colino (2011) have arrived to the conclusion that the total amount of public resources given to football installations in some Autonomous Communities, in year 2009, is totally gender biased. The authors emphasize that ¨Aragón y Baleares have a high proportion, with more than half of the total resources, spent on infrastructure works related to sport activities, meanwhile Castilla y Leon and Extremadura invested less than 10 per cent on football pitches.
In general the Plan E has supposed a failure as far as improving social and educational infrastructures dedicated to children under 5 years old because the total amount allotted to this objective was only 5% of the total budget. But it has to be said that only few Autonomous Communities such as Andalucía and Castilla la Mancha have visibly increased their coverage level of children under five as the table included below indicates
Coverage level of children under 5 and activity rate of women between 25 and 39 years, by Autonomous Communities Source: Alarcón and Colino
CONCLUSION In conclusion, it can be added that the Fund for Local Employment 2009 made very little effort to adapt the offer of educational places at pre-school level because the total amount invested on it has been one third less than the resources allotted to football pitches.
Considering the budget for year 2010, approved by Parlament on December 2009 it can be said that social expenditures were not cut. Only they were proposed by Government after the Greeck debt crisis in May 2010 and reflected in 2011 budget. When the principal objetive of economic policy was to reduce the fiscal deficit which arises to more than 10% of the Spanish GDP
Public Spending and tax benefits on family benefits in Spain
Three main types of public spending on family benefits: Child-related cash transfers to families with children Public spending on services for families with children Financial support for families through the tax system
Social benefits for the function Family/children in the EU-15 (%GDP), 1999
Social protection for the function family/children in Spain Million Euros
Net enrollment rates, 2 years old, 2007-2008 Source: Own elaboration, Office of Statistics, Ministry of Education, Social Policy and Sport
Public spending on family benefits % GDP, 2005 Source: Social Expenditure Database, OECD and ESSPROS
Tax Expenditures Budget, 2011 Income Budget Tax Exp. Budget % Personal Income Tax3549416636,946.9% Corporate Tax160083763,7723.5% Non-resident Income Tax25401121,9844.2% Other Income74- DIRECT TAX TOTAL5411621522,6539.8% VAT2496816978,1368.0% Excise duties81791268,0515.5% Foreign Trade1465- Tax on Insurance Premiums1515480,2431.7% Other15- INDIRECT TAX TOTAL3614218726,4251.8% Tributes1777113,96.4% TOTAL TAX INCOME9203540362,9743.9% Source:Ministry of Economy
Direct Expenditures vs Tax Expenditures The question is whether the use of the direct expenditure route (cash transfers, in-kind services) or the tax route is more likely to achieve the social policy goal.
Despite the increase in public spending, child care provision still insufficient
Time employed in activities related with domestic work and children care (minutes per day) Age 25 to 44 Period 1998 - 2004 Souerce: Eurostat: A statistical portrait p.203 womenMenDiferenceW/M Italy30873235422% Spain28794193305% France268123145218% UK262123139213% Finland256126130203% Germany260131129198% Belgiun271147124184% Sweeden23914297168%
Private households with employed persons (OECD: Labour Force Statistics 1988-2008. Paris, 2009)
Significant increase in domestic hiring in Spain and Italia in comparison to Finland, Denmark and Sweden
CONCLUSIONS for part II Significant tax growth in Spain since 1960's Positive trend in public spending in families, mainly non means-tested. However, still scarce. Very low proportion of family/children-related tax breaks compared to overall tax expenditures Difficulty in analyzing the evolution of tax benefits due to changes regarding tax structure definition. Need to consider TE also in gender- responsive budgeting. Due to the reduced availability of care services, varied coping strategies.