Op-Ed; Opinion

Greece budget proposal 2015

Introduction.

This budget does not take into account the debt problem. The author thinks that the only realistic way out of the crisis is to give a debt moratorium of 5 years and discuss that topic 3 years from now.

The depth of the Greek crisis is an opportunity to depart from the classical views regarding the organisation of a state, dating back to the 1950’s, to implement a system taking into account the two recent and biggest revolutions in mankind:

  1. the human brain aid (computers, pda ..) replacing in part the brain power of humans, like motors did replace the muscles of Man and horses 200 years ago.
  2. The word wide free and fast communication network.

Today, only 8% of the population is needed to produce everything: food, industrial products and buildings. The model of the fifties is “job-centric”. The model presented here is the model of 2015: it is based on distribution of purchasing power. Jobs will follow the purchasing power (the current doctrine is that we should create jobs to generate purchasing power), for those who are still thinking in terms of jobs.

Greece, like many other countries, has a long history leading to 2015, the age were machines largely replace man to produce goods. Any citizen has the right to benefit from the heritage of his country, which is now capable to produce all goods we need with just 8% of the population.

We have created a huge social capital. Every citizen should get a dividend from that capital. We call it the social dividend or “basic income”, an income where we don’t need to work for, just like rich people live from their heritage. All citizens get this social dividend. Some part in cash, some part in kind. The amount in cash depends on their age (see table in the budget).

The amount in kind is given in education checks, healthcare checks and “coaching” checks. Citizens choose their education, healthcare and coaching service provider who gets money from this “social dividend in kind” fund within the state budget.

Both education and healthcare will see drastic changes the coming years, due to aforementioned massive global revolutions. The country will witness an unprecedented increase in education and healthcare – entrepreneurs.

Those services may even attract customers from abroad.

Every citizen will have the right to be “coached”, which will help all citizens to address problems and opportunities in their lives. This coaching system will hugely reduce criminality and improve productivity.

Since working people will get a social dividend of 350 € per month, somebody earning 1100 € net now would have the same total income if he/she gets a net salary of 750 €. The basic income system makes labour less expensive for the employer, the employer being public or private.

That is why the in the budget figures, the cost for public servants, but also for education and healthcare looks so low: a part of their salary is paid, so to speak, by the social dividend.

social security social dividend : basic income
age cash cheques total number cash dividend coaching
€ pp pm € pp pm € pp pm billion €/year billion €/y billion €/y
0-17 75 50 125 2270000 2.0 1.4
18-25 250 50 300 1180000 3.5 0.7
26-60 350 50 400 5130000 21.5 3.1
61-67 400 50 450 1020000 4.9 0.6
68 + 500 50 550 1400000 8.4 0.8
11000000 40.4 6.6 47.0
sum
public service employees (remuneration on top of social dividend)
net € pp pm billion €/y
salary soc divid. total budget
national 1050 350 1400 100000 1.260
local 800 350 1150 100000 0.960
army 1050 350 1400 1000 0.013
police + 900 350 1250 100000 1.080
justice 1050 350 1400 10000 0.126 3.4
311000
Public investments and current purchases 16
Total public expenditure except loan repayments 66.5

 

Obviously, some assumptions have been made regarding numbers of people kept in public service and the reorganisation of public services relating to security (police, army, ..) which could be looked at in a different way. Education, healthcare and coaching are paid by the government through the social dividend in kind. The demand side remains “public” and fully subsidised. The “offer”–side becomes, to some extent, market driven. The cost is only 6.6 billion because a significant part of the cost of these salaries is paid through the basic income grant to the people working in those branches.

 

subsidised by social security cheques
education 800 500 1300 240000 2.304
healthcare 800 500 1300 240000 2.304
coaching 800 500 1300 200000 1.920 6.5

On the public income side, VAT is increased to 30% and collected better to move it from 14 to 24 billion €. Other consumption tax is increased from 10.7 to 15 billion € mainly by increasing prices for fuel and a new consumer tax on electricity of 10 eurocent per kwh should bring 4 billion €. Social security contributions are abolished. Payroll tax will be levied only above a net income -including basic income- of 1150 € per month . It is expected that the majority of the employees will not pay payroll taxes anymore. However, anything earned above that threshold will be taxed at 50%. We expect this tax to generate 14.4 billion €. Corporate income tax is replaced by corporate eco-tax. This is a tax on energy consumption mainly, but not exclusively. Taxes on property should generate more and a tax on financial transactions should bring another 1.5 billion €

TAXES PLAN NOW
Consumption billion €/y
   VAT 23 14
   Other 15 10.7
   tax on electricity 4
Labor
   sociial security levy 0 22
   personal income 14.4 13.5
Corporate/Wealth
   Corporate income 0 2.2
   Corporate ecotax 4
   Property 5 3.7
   Financial transaction taxes 1.5
Total 66.9 66.1

 

About Roland Duchatelet

Roland Duchatelet has written 10 articles.

The views expressed in this Op-Ed piece are solely those of the author and do not necessarily represent the view of Basic Income News or BIEN. BIEN and Basic Income News do not endorse any particular policy, but Basic Income News welcomes discussion from all points of view in its Op-Ed section.

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