Misc 29/06/2015

Structures of the (welfare) state

Toni Comin
4 min

If we’re not careful, D-Day will arrive and we will find ourselves faced with one of the most important decisions that Catalan society has had to make in recent history, and we will have failed to address the most important debate of all: discussing the pros and cons of independence.

Forced by Madrid, we spent a year arguing whether or not we could vote on 9N. We then spent three months deciding on a joint list or allied lists for the elections. Now we run the risk of spending the precious time left to us before the 27S elections on some unknown new debate on the role of civil society. Of all of these formal debates, none are devoted to the content that we need to decide on. Unamuno might still be right: "You easterners worry too much about aesthetics". The Scottish people dedicated a year to a substantive discussion of the why or why not of an independent Scotland.

Meanwhile, the central government has challenged before the Constitutional Court -- which ended up issuing suspensions-- the master plans by which the Generalitat had to start rolling out two of the most important state structures for an eventual independent Catalonia: a Treasury Authority and its own Social Security Agency. We can talk about these two structures of state from different perspectives. They can be presented as the reason for the umpteenth legal clash between the Catalan Parliament and Madrid. They can appear as an eminently technical question, on which our solvency as a new State rests. Or they can be seen as the two key institutions for defining a social model for a country.

If we look at them from this third perspective, the Catalan Treasury and Social Security Agency should raise a debate that goes far beyond their own technical and organizational dimension, because they are none other than the two basic pillars of any welfare state. The debate over state structures is a golden opportunity to discuss precisely that which we should be talking more about now: the sense and reasons for independence. Let’s not blow this chance.

Do we want to reduce poverty in Catalonia --one of the highest in the EU, above 20%-- to less than 10%, as the more socially developed countries in the EU have managed to do? Then that depends, to a great extent, on our Social Security and the system of contributory and non-contributory pensions that we might be able to implement in our new State.

Today, Spain --and, therefore, Catalonia-- is the country with the third highest rate of tax fraud in Europe. We have tax rates that are at the EU average, but Spain takes in 10 points less of GDP than the European average. Owing to tax fraud, every year the Catalan welfare state loses the same sum that is lost due to the fiscal deficit: 16 billion euros. It is largely for this reason that our welfare state is second-tier: because of the weakness of our tax base.

This is tax fraud, incidentally, that is mainly found --according to data from the union of sub-inspectors for the Spanish Treasury -- in the country’s largest fortunes and largest companies. That might explain, in part, the attitude of those Catalan financial elites that oppose the independence process the most. Wouldn’t these elites prefer to continue within a State --Spain-- whose Treasury today allows them to live in peace, rather than take a chance in a new Catalonia that might make them comply with the very tax obligations that they are dodging now?

Do we want a high-end welfare state? Do we want to combat tax fraud so as to bring it down to the EU average, at least? Do we want to dedicate the same spending per person on education, health, and policies supporting families as our surrounding countries do? To achieve all that, the Treasury of a future Catalonia --and its capacity to guarantee tax compliance comparable to more advanced European countries-- will be a key factor.

To ask ourselves what the purpose of our state structures would be is to ask what model of welfare state we hope to build in our new country. Do we want the Nordic model, or the Anglo-Saxon one? With what degree of equity? How fair and prosperous do we want an independent Catalonia to be? Is independence an opportunity to go from the second-tier welfare state that we have now --and we would most likely continue to have in the current framework of autonomous regions-- to a top-of-the-range welfare state?

Perhaps if we ask these questions we will be able to spark the interest of that part of Catalan society that still looks at independence with indifference. Hadn’t we agreed that independence will only achieve a majority if it was able to appear as a driving force for social justice and democratic regeneration? In a word, if it managed to come across as a "social independence movement".

Let’s talk less about the roles of the parties and the pro-independence organizations in the run up to the September 27th elections, and more about the role of a Catalan Treasury and Social Security Agency in a new country. There is no better example, right now, to explain how and why the national axis --independence-- and the social axis -- social justice-- are inseparable. It is in this substantive debate, and not in that formal debate over electoral lists, where we will find victory in the plebiscite elections. And where our victory as a society will be at stake, once the constituent process begins.