by Florie Barnhoorn | Aug 5, 2017 | News
Summer 2017,
On Thursday, July 21, the city council of Amsterdam decided that it will in no way adopt stricter local rules for its social assistance recipients, not even on paper. A large majority of the members supported a motion submitted by the chairman of the GreenLeft (GroenLinks), Rutger Groot Wassink.
The motion called for Amsterdam’s alderman for Work, Income and Participation, Arjan Vliegenthart (Socialist Party), not to lay down regulations for forced compensation in a local statute (as described below) and to launch its own social assistance experiment in September. Only the VVD and the CDA voted against it. A conflict was born.
The Participation Act, which was introduced in 2015, requires municipalities to force each social benefit recipient to make a useful contribution to society, in exchange for his or her social benefit payments. This is the very controversial so-called ‘compensation’ (Dutch: Tegenprestatie). The ‘compensation’ can be voluntary work, taking up a language training or giving informal care.
The Participation Act also requires every municipality to lay down the regulations regarding the ‘compensation’ in a local statute. This document may contain for instance punitive measures that can be imposed on a reluctant recipient. Since the introduction of the law in 2015, Amsterdam has refused to fulfill these requirements. The city does not demand a compensation from every social benefit claimant and has not recorded the necessary regulations in its local statutes. However, Jetta Klijnsma (PvdA / Labour Party), the State Secretary for Social Affairs and Employment, will only give her permission for social assistance experiments in municipalities that have fully implemented the Participation Act.[1] (See also NETHERLANDS: Design of BI Experiments Proposed.)
Consequently, Amsterdam is heading to a confrontation with Klijnsma, who insists that the municipal authorities record their local rules on paper first in accordance with the law. Only then would Amsterdam be allowed to start with its social assistance experiment.
Earlier in the week, on July 14, Klijnsma called on Amsterdam to be pragmatic by incorporating the desired ‘technical adjustment’ (i.e. regulations with regard to the compensation as stated in the Participation Act and the local legislation in case of default, mentioned above) into its local statutes: “It would be very sad, if the Amsterdam City Council misses the opportunity, because of this ‘technical point’, to execute an experiment with the social assistance program. If Amsterdam participates, wide public support will be generated and the experiments will gain more significance.”
Additionally, in an attempt to pacify the situation, she stressed that “Municipalities do not need to impose that obligation in practice, because they have much ‘freedom of policy’ in the execution of the Participation Act.”
Municipal councillor and leader of GroenLinks, Groot Wassink, refers to Klijnsma’s demands as ‘ridiculous’. He does not want to ‘give in’ due to the ‘blackmail’ of an outgoing secretary of state: “It seems that the state secretary has launched a kind of punitive expedition to Amsterdam.”
Vliegenthart, who is not happy with the politicized debate with the PvdA state secretary, is nevertheless planning to implement the motion. He wants to present the design of his own experiment in September. According to the councillor, such an experiment exclusively for Amsterdam is legally possible: “I will make it legal as waterproof as possible.” The plan will be very similar to a research proposal that the city submitted earlier to Klijnsma and which was already approved.
“According to scientific research, compulsion and coercion do not help,” says Vliegenthart, “We want to make it easier for our social benefit recipients to find a job, not to impose on them restrictive measures.” He wants to start a social assistance experiment whereby recipients, who have difficulties in getting paid work, are allowed to earn some money on top of their benefits. In this way, on Vliegenthart’s view, work would be not only a compensation for society’s ‘gift’ (i.e. the welfare payments), as Klijnsma views it, but a project that really yields something.
The Council of State has already decided that the municipalities are free to include the compensation in the experiments or not. Vliegenthart also thinks so, after obtaining legal advice. “I suppose the state secretary is wrong,” he has said. However, she can still block Amsterdam’s experiment by legal means.
Groningen (including the neighboring village of Ten Boer), Wageningen, Tilburg, Deventer and Nijmegen are the first municipalities which have been given permission to begin social assistance experiments. Since early July, another municipality, Apeldoorn, has also started a social assistance experiment directed at developing self-management skills and tailor-made solutions. The municipalities of Epe, Oss and Geldrop-Mierlo, relatively rural municipalities situated in the eastern and southern part of the Netherlands, have joined the project that is led by Apeldoorn. This experiment fits within the framework of the Participation Act. The research involves about 90 participants from Epe and 450 from Apeldoorn and receives scientific guidance from Tilburg University. The trial will run until July 2019.
Under the Participation Act, up to 25 municipalities in the Netherlands may execute experiments, with each experiment lasting two years. Nationwide there is room for over 18.000 beneficiaries between the various projects.
See also Kate McFarland in The Netherlands: Government authorizes social assistance experiments in first five municipalities.
Credit Photo: Pixabay (Amsterdam, City Hall), tpsdave.
Thanks to Kate McFarland for reviewing the article and for her enthusiasm.
1. All social assistance experiments must be approved by the Ministry of Social Affairs and Employment. For that reason the ministry has developed a general administrative regulation (Dutch: Algemene Maatregel van Bestuur / AMvB). This document sets out the exact standards for the implementation of the social assistance experiments. See also The Netherlands: All that’s left is the action. Where do we stand with the social assistance experiments?↩
by Bryan Tierney | Aug 2, 2017 | News
Comments to European Economic and Social Committee (EESC) consultation on the Future of Europe in Dublin, Ireland, June 7, 2017
Social Justice Ireland, an independent Irish think tank and justice advocacy organization, has endorsed proposals for the introduction of an EU-wide basic income system. Speaking at an EESC event held in Dublin on June 7th, Dr Seán Healy, Director of Social Justice Ireland, identified two key areas eroding confidence in the EU:
“1.1. Failure to address the ongoing vulnerability of many EU citizens.
1.2. Failure of the European Commission to protect small countries against its larger, stronger members.”
Addressing the first point, Dr Healy referred to recommendations made in May 2017 by a UN expert group meeting on “Strategies for Eradicating Poverty to Achieve Sustainable Development for All”:
“The social welfare systems in developed countries are no longer fit for purpose. There should be an adjustment of the paradigm including promotion, and openness to study new ideas around a new social contract that is more appropriate for the 21st century. This may entail moving towards a universal basic income system, supporting a living wage rather than a minimum wage, recognizing all work (not just paid employment) as meaningful, and ensuring that all government decisions are subjected to a poverty-proofing process. While the centrality of employment and decent jobs to eradicate poverty is well recognized, employment growth has not been sufficient to absorb the growing labour force, particularly in those countries and regions with large youth populations. Further, there has been a divergence between productivity and wages growth, as well as growing employment insecurity and casualization in all countries.”
In his speaking notes, Dr Healy agreed with the UN expert group’s analysis and recommendations, adding that the EU has consistently ignored these issues. According to Dr Healy, none of the five options provided in the EU White Paper on the Future of Europe address these points, going on to note that:
“An alternative option is required that will protect the vulnerable and move towards a future that effectively addresses poverty, unemployment, inequality and exclusion. The EU needs to become, and be seen to become, a caring Union.”
In the context of Irish politics, universal basic income (UBI) has been endorsed by some of the main political parties. The Green Party has long been in favour of the establishment of a basic income, while Fianna Fáil—the country’s second largest party—has talked about the idea for many years. Fianna Fáil’s spokesperson on social protection, Willie O’Dea, has called for radical reforms of the welfare system. The veteran politician and basic income advocate has said that, if Fianna Fáil were in office, a government-established commission would report on the idea within six months. Writing about UBI in a news article in January of this year, he said:
“While the broad concept of UBI has been around for a while, the challenges facing us today – particularly the changing and often precarious nature of work, not least the threat to jobs posed by automation and short-term contracts – make it a realistic and workable response.
“UBI would replace virtually every non-pension welfare payment except disability and housing benefits. Scrapping the myriad complex and often contradictory welfare codes would mean the end of welfare administration and expensive means-testing, an end to pointless and unproductive Intreo/job-centre interviews and hated sanctions. The biggest long-term saving, however, would stem from ending the poverty trap disincentives built into the current system, where taking a job can leave you financially worse off.”
The current government, which was formed following the appointment of Leo Varadkar as Taoiseach (prime minister) in June 2017, comprises the largest Irish political party, Fine Gael, and several independents, and is propped up by Fianna Fáil – Fine Gael’s historic rival – in a confidence and supply agreement. Fine Gael have been critical of Fianna Fáil’s basic income proposals and they do not currently have any proposals for the introduction of UBI. The Irish budget for 2018 will likely bring about increases to existing social welfare payments without any of the radical reforms proposed by rival parties.
References and further reading
Dr Seán Healy, Comments to the EESC Consultation on the Future of Europe, Social Justice Ireland, June 2017, <https://www.socialjustice.ie/sites/default/files/attach/publication/4855/2017-06-07-jointeventforeesc-seanhealyspeakingnotes.pdf>
Expert Group Meeting, “Strategies for Eradicating Poverty to Achieve Sustainable Development for All”, United Nations Headquarters, 8-11 May 2017, <https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2017/04/report-egm-poverty2017.pdf>
Willie O’Dea, “Basic incomes for all would end the welfare poverty trap and give people greater control of their lives”, Independent.ie, 19 January 2017, <https://www.independent.ie/opinion/comment/basic-incomes-for-all-would-end-the-welfare-poverty-trap-and-give-people-greater-control-of-their-lives-35379503.html>
European Commission, “White Paper on the Future of Europe”, European Commission, March 2017, <https://ec.europa.eu/commission/sites/beta-political/files/white_paper_on_the_future_of_europe_en.pdf>
Reviewed by Genevieve Shanahan
Photo: Irish flag, CC BY-SA 2.0 by jcdcv
by Furui Cheng | Jul 30, 2017 | News
Shenzhen City
Shenzhen is one of the four current first-tier cities in China, and the other three are Beijing, Shanghai and Guangzhou. In February 2017, Shenzhen Innovation and Development Institute, a famous think tank founded in 2013, issued an “Outline of Shared development in Shenzhen”, which calls for a social dividend program in a package of reform measures.
Shenzhen is the first Special Economic Zone in China. In 1980, it was a poor rural area with 30,000 people. But now, more than 30 years later, it has a population of almost 20 million, with 11.9 million local permanent residents. Its total GDP is similar to Hong Kong, one of China’s Special Administration Regions. Shenzhen citizens’ per capita GDP was US $25,400 in 2015, and it is stepping into global middle developed cities. “The Sharing Shenzhen” is a new strategy after the previous “The Speed Shenzhen” and “The Quality Shenzhen”.
Although Shenzhen’s nominal per capita GDP is similar to that of South Korea, its per capita disposal income is only half of the latter’s. At the same time, the housing price in Shenzhen is double that of South Korea. Most people are living in substandard conditions, especially those 8 million non-permanent residents who have been totally excluded from the local social security system. Furthermore, no matter their income levels or social security levels, there are big gaps among even permanent residents. The Gini coefficient in Shenzhen per capita income is almost 0.5.
Shenzhen is thus facing a very big challenge of adjusting income structures to achieve social justice. Twenty Suggestions for “The Sharing Shenzhen Outline” include:
- One billion tax relief program, to help enterprises and people;
- To continue to raise the minimum wage;
- To raise working income and expand the proportion of middle-income workers;
- To improve the salaries and benefits of civil servants, so that the city managers can share the fruit of urban reform and development;
- To establish state-owned capital dividend fund, letting all the people share the results of reform and development of state-owned enterprises;
- To restart the “common prosperity” plan, to reduce the gap between permanent residents and the immigrants;
- To raise and expand the minimum guarantee income system, to cover the whole population;
- To expand the social assistance system to the medium income families including the immigrants;
- To establish a more equitable social security system covering the immigrants;
- To put the non-household residents into the housing security system, to achieve the safe living dream for everyone;
- To establish the welfare and service system for the elderly;
- To establish the universal social welfare and relief policies, so that Shenzhen’s warmth and sunshine can reach all children;
- To develop social charity system;
- To reduce the subway and bus fares;
- To promote equal employment;
- To promote fair education;
- To reform the expensive medical system;
- To relax the conditions of household registration, to make more people permanent residents;
- To control and reduce the high housing prices, to make young people full of hope and dream;
- All residents to enjoy the right of participation in social management and assume the obligations.
For the specific suggestion No. 5, the outline suggests Shenzhen should learn from Singapore, Hong Kong and Macau to give citizens a social dividend from the city’s fiscal surplus. In 2015, Shenzhen had 918.1 billion yuan [US $135.9 billion] total assets of state-owned enterprises, 461.6 billion yuan [US $68.3 billion] net assets, and 36 billion yuan [US $5 billion] profit. In addition to the corporate tax, the municipal government should get their net profit of 12.7 billion yuan [US $1.88 billion] per year as shareholders. Based on the average dividend payout ratio of Chinese listed companies, at least one third of the annual net profit could be distributed in cash as social dividend among all the residents. Given present figures, that would be 1,000 yuan [US $148] every two years for every resident. While this dividend might appear small, it is just a very conservative part of the net profit, and we can expect an increase in the future.
In the above description, Shenzhen is basically China’s miniature. The whole country faces similar problems and situations. So this plan captured the national attention after its announcement. Additionally, the director of the Shenzhen Innovation and Development Institute, Zhang Siping, is the former deputy mayor of Shenzhen city itself, and many councilors of the Institute are formerly from government sectors. They know the real crux of the city’s development, and they are making a fair plan out of their offices. This is another reason why “The Sharing Shenzhen Outline” is so striking in China.
In fact, China has not only local but also national state-owned enterprises, and the latter ones have much bigger profits. “The Sharing Shenzhen Outline” mentions only the former. All Chinese people could expect to get a national dividend plus a local one in the future.
More background information at:
Karl Widerquist, “SINGAPORE: Government gives a ‘growth dividend’ to all adult citizens”, Basic Income News, June 8th, 2011
Special thanks to Kate McFarland for reviewing this article.
by Julen Bollain | Jul 28, 2017 | Opinion
The Spanish publisher RBA has just released a new book by Daniel Raventós, Renta básica contra la incertidumbre (Basic Income against Uncertainty), in its “los retos de la economía” (Economic Challenges) collection. The book updates the most important developments in basic income and discusses recent writings. The collection, in which the book is included, is not academic, but one which presents the basic elements of today’s concerns (inequality, the welfare state, and so on) to non-specialist readers, in such a way as to serve as a basis for further study.
Raventós’ book not only discusses the theoretical issues of basic income, but also gives an account of the social and political situation which has led to this proposal becoming widely known and regularly debated in social movements, the media, political parties and trade unions. Just a few years ago, this was unimaginable. Some people were complacently asserting that basic income could never be openly recommended because it would “shock” or “repel” the population, or at least a good part of it. It would have to be introduced, if at all, through the back door.
Well, we have lived to see the day! Here we offer an extract from the introduction of Renta básica contra la incertidumbre, which will soon appear in an Italian edition. The book has six chapters in which Raventós discusses the normative aspects from the standpoint of political philosophy (with particular reference to property and freedom); how basic income has been received in social movements like feminism and environmentalism, as well as in trade unions; how to finance it; experiments with basic income in various parts of the world; the role of basic income in an increasingly unequal world, in which mechanisation is advancing at a dizzying pace; and the paradox of support from both the right and left.
“Basic income will be paid out to people simply because they exist as citizens or accredited residents, independently of gender, ethnic group, income, sexual orientation, religious affiliation or lack thereof. Hence, like universal democratic suffrage, basic income is a proposal with the formal characteristics of laicism, unconditionality and universality.
Basic income has to confront considerable intellectual, social, philosophical, economic and political resistance, often in the form of questions. Is basic income a just proposal? Do people who disdain a salaried job have the right to an unconditional cash transfer? Will it abolish poverty? Aren’t the usual welfare state conditional cash transfers a better way to combat poverty? Will people get or stay in jobs if they have a basic income? Wouldn’t it be better to aim for full employment? Would workers have better bargaining power if they received a basic income? How would basic income affect migratory flows of impoverished people from poor countries to rich countries? Would everyone, both rich and poor, gain with a basic income? Would or wouldn’t women benefit from a basic income? Given the threat of robotisation in many areas of work, does basic income have something to offer?
Since inequality between a tiny minority of extremely rich people and the rest of the population is constantly increasing—as Joseph Stiglitz, Nobel-Prize-winning economist and others have pointed out and studied—would basic income be a good idea? If basic income has supporters on both the right and left, are they advocating the same thing?
Then there is the most frequently repeated objection, also in the form of a question. Can basic income be financed? In fact, it would be more precise to say that it was “most frequently repeated until recently”. Although there are not many studies which demonstrate in detail and with technical competence how basic income can be financed, those that have been published are compelling. Whatever they might have in common, each region and each country is different in economic terms, but financing a basic income would have to take the form of changes in budgetary priorities and reforming tax systems. For example, there are proposals advocating the introduction of special mechanisms for taxing financial transactions.
These reforms would bring about a substantial reduction in inequality of income distribution and allow for simpler, more coherent tax and welfare benefits systems. Basic income is not a panacea or a quick-fix for all the world’s social and economic problems but, in view of many who study and espouse it, this measure would mean that people would be better equipped to participate in productive activities, social inclusion would improve, communities would be stronger, political and social participation would be revitalised, and there would be a significant reduction of poverty and all the problems that go with it.
Basic income is not a political economy, per se, but would be part of one, as well as a general project aiming to guarantee and underpin the material existence of the whole population. It might also be seen as a kind of indemnity for past and present wrongs since it requires more privileged citizens to contribute towards achieving the right of existence for everyone. And herein lies one of the main political obstacles for basic income.
This is also the point which makes it possible to explain the apparent paradox of left and right support for basic income. The book notes that the difference depends on financing. The left focuses on additional taxes on the rich, while the right wants to trim down existing welfare to pay for basic income.
“In other words, the left-wing position does not entail any cuts to existing social services or social rights, in education, health, support for dependents, housing, etc., all of which are essential in any welfare state worthy of the name.”
by Furui Cheng | Jul 27, 2017 | News
Macau City
The government of the Macau Special Administrative Region (SAR) in China has announced the “Wealth Partaking Scheme 2017” (WPS), under which local permanent residents are entitled to receive a small annual unconditional basic income of 9,000 patacas [US $1,128 (1)] and non-permanent residents 5,400 patacas [US $672]. With the Administrative Regulation No. 18/2017, the scheme came into effect on 6th June 2017, and its implementation officially started on 3rd July.
Since 2008, the government of the Macao SAR has given an annual state bonus to its all citizens. The WPS 2017 is very similar to the 2016 one. This year, there are 638,600 Macau permanent residents entitled to WPS, and 62,000 non-permanent residents. The total budget for the WPS 2017 is 6,080 million patacas [US $757 million].
Recipients must have been holders of valid or renewable Macau SAR Resident Identity Cards as of December 31, 2016 to be entitled to receive the cash premium, according to a statement from the Financial Services Bureau (DSF). Holders of a valid or renewable Macau SAR Resident Identity Card who are currently residing abroad will be granted the cash premium, provided they can prove that they are unable to renew their Macau SAR Resident Identity Card due to being either bedridden or completely or partly paralyzed. Those who submitted the relevant documentation and were granted the cash premium in the previous year may be exempted from document resubmission if the Social Welfare Bureau (IAS) concludes that no new evidence is required.
A direct bank transfer will be arranged for those who are receiving financial assistance or senior citizen subsidies from the IAS, according to the statement. The same will apply to retired civil servants receiving a retirement pension and other persons receiving such a pension for the family of the deceased. Most of the rest of the populace will be awarded the cash premium through a crossed check via mail. The crossed check can only be deposited into the payee’s account. In this way, the DSF notes that even if one receives a check addressed to another, it cannot be cashed.
A different procedure applies to beneficiaries under the age of 18. They will each receive a check made payable either to themselves or their parents, which may be deposited either into the beneficiary’s account or the account of one of their parents.
In addition to the WPS state bonus, the Macao SAR government has injected an annual capital into all qualified Provident Fund Individual Accounts since 2010. Provident fund individual accounts are provided to Macao SAR residents of the age of 22, and they are used to receive the “incentive basic fund” and “special allocation from budget surplus”. No formalities are required for the individual accounts of those who are already on the list of special allocation from budget surplus, which is 7,000 patacas [US $872] for 2017. Individuals who are entitled to the allocation of funds for the first time will also be allocated the incentive basic fund of 10,000 patacas [US $1,245].
Notes:
(1) – At July 2017 exchange rates.
More information at:
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Plano de Comparticipação Pecuniária no Desenvolvimento Económico do Ano 2017 [2017 Wealth Partaking Scheme]”, 2017
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Fundo de Segurança Social [Social Security Fund]”, 2017
Paulo Coutinho, “Handout distribution starts next month”, Macau Daily Times, July 3rd, 2017
Furui Cheng, “China: Macao gives an annual state bonus to all citizens”, Basic Income News, August 31st, 2016
Karl Widerquist, “China: Macau residents to receive annual basic income”, Basic Income News, June 30th, 2015
Karl Widerquist, “Macau: Government Distributes Temporary Basic Income”, Basic Income News, August 23rd, 2014
Article reviewed by Kate McFarland.
