The Government faces a very complicated task in Parliament until the end of 2023. It has to approve at least 40 regulations with the force of law to comply with the reforms committed to Brussels in exchange for European funds. The account goes practically to one every 15 days. The audiovisual law, the telecommunications law, the bankruptcy law, the Crea y Crece law, the start up… All these have to be ready before the end of the year. And the Executive is climbing a steep uphill with the easiest part of the second phase of the pension reform that has to be approved: the company pension plans promoted by the public sector.
The CEOE employers have opposed it above all because of the rejection it inspired in banking and insurance companies. They have complained that tax incentives have been reduced for private individual plans while they have been increased for employment or company plans. The unions have not liked it at all either. So this legislation has reached Congress without the support of the social partners.
And immediately it was shipwrecked. The left does not support it. Podemos partners have criticized the project because they say it could be a way to privatize pensions. In the first vote in March on this text, they voted against it. And they have introduced dozens of amendments that go against the project or distort it. For example, they seek to reduce the amounts that can be deducted to make them equal to individual plans: that they be 1,500 euros instead of the 10,000 cap that the Government has raised for these employment plans.
The idea of the Minister of Social Security, José Luis Escrivá, is that all workers can get a supplement to their pension, not just those with high incomes. So the Government has tested Citizens and PP. PDeCAT, Junts per Catalunya, the PNV or even Vox could also enter. ERC’s position is ambiguous and it could seek a negotiation from which to take advantage.
Both PP and Ciudadanos requested a tax deduction in the Corporation tax so that the measure was attractive for companies. Several sectors such as construction had requested this help so that the plans could take off. And the Executive has accepted that companies can deduct 10% of their contribution to the employment plan for workers with a salary of less than 27,000 euros. From that figure, the percentage goes down as the salary rises. These salaries, those that are below 27,000 euros, are the ones that will have the least pension and the least chance of accessing an individual pension plan, Ciudadanos defends. Although the Government claimed that it involved a fiscal cost, it has been accepted in order to pass the law. And another red line of Citizens has also been admitted: to modify governance so that the Government did not have the capacity to choose the destination of the investments of the funds.
PP, support for closing
He knows in depth all the sides of the coin.
It would be necessary to close the support of the PP, which asks, in addition to the deduction, that an amendment be accepted so that the self-employed and mutual members can make the transition to the simplified employment plan, which is the way for these groups to participate in the benefits of these plans and that the Government also claimed that it was a cost. However, José Antonio Herce, founding partner of Loris, explains that conversion to these plans can be very expensive and that it is better to simply give them the same treatment as simplified employment plans, as advocated by an amendment to the PDeCAT.
The irony is that Escrivá could draw up the regulations with the right-wing parties. Although government sources still take everything for granted. At the moment, the lack of agreement has meant that the commission has not been set a date to vote on the amendments. They have all been left alive so that there can still be a negotiation. The commission has to be held this week or the next so that the reform is ready on June 30, the date agreed with Brussels. If not approved, it could delay and complicate the payment of 6,000 million corresponding to the second half of this year.
This year it remains to approve the unstopping of contributions, make the self-employed pay for their real income and the extension of the calculation period. Regarding this last measure, the Ministry of Social Security always insists that it will be compensated, leaving workers to choose the best years and being able to close contribution gaps. Such reforms will also entail a complicated negotiation so that they are approved before December 31, the date by which they are committed to Brussels in exchange for funds.
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