Some budgetary measures taken under the crisis. A gender perspective Paloma de Villota.

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

Revenue Statistics 2010 / Statistiques des recettes publiques 2010 - © OECD 2010PART I Table A. Total tax revenue as percentage of GDPVersion 1 - Last updated: 02-Nov-2010

1965 1975 1985 1995 2000 2007 20082009

provisional

Australia 20.5 25.2 27.6 28.0 30.3 29.5 27.1 n.a.

Austria133.9 36.6 40.8 41.4 43.2 42.1 42.7 42.8

Belgium 31.1 39.5 44.3 43.5 44.7 43.8 44.2 43.2

Canada 25.7 32.0 32.5 35.6 35.6 33.0 32.3 31.1

Chile 19.0 19.4 24.0 22.5 18.2 4

Czech Republic 37.6 35.3 37.3 36.0 34.8

Denmark 1 30.0 38.4 46.1 48.8 49.4 49.0 48.2 48.2

Finland 30.4 36.6 39.8 45.7 47.2 43.0 43.1 43.1

France 1 34.1 35.4 42.8 42.9 44.4 43.5 43.2 41.9

Germany 231.6 34.3 36.1 37.2 37.2 36.0 37.0 37.0

Greece 17.8 19.4 25.5 28.9 34.0 32.3 32.6 29.4

Hungary 41.3 38.5 39.7 40.2 39.1

Iceland 26.2 30.0 28.2 31.2 37.2 40.6 36.8 34.1

Ireland 24.9 28.8 34.7 32.5 31.3 30.9 28.8 27.8

Israel 3 37.0 36.8 36.3 33.8 31.4

Italy 25.5 25.4 33.6 40.1 42.2 43.4 43.3 43.5

Japan 18.2 20.8 27.1 26.8 27.0 28.3 28.1 n.a.

Korea 14.9 16.1 20.0 22.6 26.5 26.5 25.6

Luxembourg 27.7 32.8 39.4 37.1 39.1 35.7 35.5 37.5

Mexico 15.5 15.2 16.9 17.9 21.0 17.5 5

Netherlands 32.8 40.7 42.4 41.5 39.6 38.7 39.1 n.a.

New Zealand 24.1 28.7 31.3 36.2 33.2 35.1 33.7 31.0

Norway 29.6 39.2 42.6 40.9 42.6 43.8 42.6 41.0

Poland 36.2 32.8 34.8 34.3 n.a.

Portugal 15.9 19.1 24.5 30.9 32.8 35.2 35.2 n.a.

Slovak Republic 34.1 29.4 29.3 29.3

Slovenia 39.2 37.5 37.8 37.2 37.9

Spain 114.7 18.4 27.6 32.1 34.2 37.3 33.3 30.7

Sweden 33.4 41.3 47.4 47.5 51.4 47.4 46.3 46.4

Switzerland 17.5 23.9 25.5 27.7 30.0 28.9 29.1 30.3

Turkey 10.6 11.9 11.5 16.8 24.2 24.1 24.2 24.6

United Kingdom 30.4 34.9 37.0 34.0 36.4 36.2 35.7 34.3

United States 24.7 25.6 25.6 27.8 29.5 27.9 26.1 24.0

Unweighted average:

OECD Total 25.5 29.4 32.5 34.4 35.5 35.4 34.8 n.a.

Table A. Total tax revenue as percentage of GDP

Total tax ratio as percentage of GDP, 2007Chart A. Total tax revenue as percentage of GDP, 2008

Graphique A. Total des recettes fiscales en pourcentage du PIB, 2008

0 10 20 30 40 50 60

MexicoChile

TurkeyUnited States

KoreaAustralia

JapanIreland

SwitzerlandSlovak Republic

CanadaGreece

SpainNew Zealand

IsraelPoland

PortugalLuxembourg

United KingdomCzech Republic

IcelandGermanySlovenia

NetherlandsHungaryNorwayAustriaFinlandFrance

ItalyBelgiumSweden

Denmark

Source: Table 1/ Tableau 1.1. Countries have been ranked by their total tax revenue to GDP ratios.1. Le classement des pays a été fait en fonction du total des recettes fiscales par rapport au PIB.

The data for Israel are supplied by and under the responsability of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10

Iceland

Turkey

United States

Canada

Korea

Switzerland

Netherlands

Germany

United Kingdom

Australia

New Zealand

OECD (+3.2)

Finland

Norway

Austria

Belgium

Portugal

Ireland

Greece

Sweden

J apan

Luxembourg

France

Denmark

Italy

Spain

Source : Table 3/ Tableau 3.


Chart C. Changes in tax to GDP ratio (in percentage points)Graphique C. Variations du niveau d'imposition (en points de pourcentage)1975-1985

1975-1985

-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8

Hungary2United Kingdom

Czech Republic3

LuxembourgIrelandNorway

NetherlandsBelgium

J apanMexico

Sweden

FranceAustralia

Austria

GermanyChile1

OECD (+1.9)

Poland2Switzerland

United States

DenmarkIceland

Canada

GreeceKorea

SpainNew Zealand

Turkey

FinlandPortugal

Italy

Source : Table 3/ Tableau 3.1. 1990-95.2. 1991-95.3. 1993-95.


Chart D. Changes in tax to GDP ratio (in percentage points)Graphique D. Variations du niveau d'imposition (en points de pourcentage)

1985-1995

-8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11

Slovak Republic1Ireland

CanadaIsrael

FinlandNew ZealandNetherlands

SloveniaPoland

United StatesLuxembourg

Czech RepublicSwedenHungaryAustraliaDenmarkGermany

FranceOECD (+0.4)

BelgiumSpain

AustriaSwitzerland

J apanUnited Kingdom

NorwayItaly

ChileGreece

PortugalIcelandMexicoKoreaTurkey

Source : Table 3/ Tableau 3.1. 1998-2008


Chart E. Changes in tax to GDP ratio (in percentage points)Graphique E. Variations du niveau d'imposition (en points de pourcentage) 1995-2008

1995-2008

Total taxes related to GDP

Since 1978, Spain has been transformed in a Federal Fiscal System like USA or Germany

LAST FISCAL REFORMS ON INCOME TAX

l

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

0 10 20 30 40 50 60

Rendimiento íntegro del trabajo (miles de euros)

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o m

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F

% Mujeres

% Hombres

Tipo marginal IRPF

Función de densidad por sexo y tipos marginales del IRPF, ejercicio 2004

Fuente: elaboración propia a partir de la Muestra AEAT-IEF IRPF 2004 (941.029 declaraciones extraídas por muestreo estratificado aleatorio)

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Salario bruto (miles de euros)

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PF

% Mujeres % Hombres Tipo marginal IRPF

Función de densidad y tipos marginales del IRPFTarifa 2007

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Salario bruto (miles de euros)

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% d

e as

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iado

s/as

0%

10%

20%

30%

40%

50%

Tipo

mar

gina

l IR

PF

% Mujeres % Hombres Tipo marginal IRPF

Función de densidad y tipos marginales del IRPFTarifa 2007

0 10 20 30 40 50 60

Rendimiento íntegro del trabajo (miles de euros)

0.0%

1.0%

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%

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RP

F

% Mujeres

% Hombres

Tipo marginal IRPF

Función de densidad por sexo y tipos marginales del IRPF, ejercicio 2004

Public opinion in 2009

¿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)

1994 2005200

6 2007 2008200

9199

4 2005 2006 2007 2008200

9

Employment/population ratio:

Canada 73,0 76,7 76,8 77,2 77,2 74,0 61,1 68,3 69,0 70,1 70,1 69,1

Spain 63,3 76,4 77,3 77,4 74,6 67,5 31,5 51,9 54,0 55,5 56,7 53,5 OECD (weighted average) 75,4 75,0 75,6 75,9 75,8 73,2 52,7 55,9 56,7 57,2 57,8 56,5

Labour force participation ratio:

Canada 82,0 82,5 82,2 82,5 82,7 81,8 67,8 73,1 73,5 74,3 74,4 74,4


Unemployment rate:

Canada 11,0 7,1 6,6 6,4 6,7 9,6 9,8 6,5 6,1 5,7 5,7 7,1


(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

Servicios Urbanización Urbanización Redes

sociales pública comercial viales Agua Resto Millones € %Andalucía 65,0 132,3 98,0 14,8 310,2 649,3 141,6 45,5 162,1 71,0 90,6 1.160,1 1.470,3 18,02Aragón 24,9 29,0 21,2 4,1 79,2 90,8 14,3 5,5 16,8 11,7 19,1 158,3 237,6 2,91Canarias 22,7 40,7 60,4 0,8 124,7 120,3 22,5 14,5 21,7 34,2 22,1 235,3 359,9 4,41Cantabria 1,9 9,4 9,6 0,2 21,1 47,1 7,6 2,7 18,0 3,2 2,0 80,6 101,7 1,25Castilla - La Mancha 7,1 46,7 35,2 4,4 93,5 137,8 27,0 14,9 31,3 19,5 34,1 264,6 358,1 4,39Castilla y León 4,8 55,5 32,8 1,5 94,6 195,3 36,5 19,5 34,6 40,1 35,7 361,7 456,4 5,59Cataluña 94,8 137,9 100,5 7,9 341,1 537,2 110,2 44,6 118,3 45,2 78,8 934,4 1.275,5 15,63Ceuta y Melilla 0,0 0,0 0,6 0,0 0,6 8,3 0,7 1,5 1,9 11,7 1,0 25,1 25,7 0,32C. Madrid 80,2 107,3 75,2 7,0 269,8 463,3 99,8 17,6 126,1 44,4 75,9 827,1 1.096,8 13,44C. F. Navarra 8,1 20,6 8,1 0,2 36,9 34,7 8,7 3,5 13,2 2,1 7,7 69,8 106,8 1,31C. Valenciana 52,0 98,5 93,5 22,5 266,5 332,3 75,3 23,4 93,1 53,9 53,9 631,9 898,4 11,01Extremadura 5,7 35,6 23,0 3,9 68,2 63,7 21,0 4,5 13,3 9,9 16,3 128,6 196,8 2,41Galicia 13,3 51,8 36,1 1,5 102,6 193,8 33,5 19,3 44,8 50,5 52,5 394,4 497,0 6,09I. Baleares 6,5 15,7 11,4 0,8 34,5 86,4 12,4 7,2 24,9 20,7 14,8 166,5 201,0 2,46La Rioja 0,8 13,4 4,6 0,6 19,3 18,9 6,1 1,2 3,2 7,2 1,8 38,3 57,7 0,71País Vasco 11,0 47,4 19,6 0,2 78,2 161,2 24,2 8,5 67,7 30,9 24,3 316,8 394,9 4,84P. Asturias 9,5 23,5 14,4 0,2 47,6 55,8 31,5 5,4 1,1 16,2 15,5 125,5 173,1 2,12R. Murcia 6,5 31,4 12,1 1,4 51,3 111,2 5,9 16,5 51,5 6,0 9,5 200,6 252,0 3,09

ESPAÑA 415,1 896,7 656,3 72,1 2.040,1 3.307,2 678,8 255,8 843,7 478,6 555,6 6.119,7 8.159,8 100,00

TOTALMillones de €Subtotal

INFRAESTRUCTURAS

Educación Deportes Salud Subtotal Alumbrado

EQUIPAMIENTOS SOCIALES

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 CCAAHeadings of the table: Sports Complexes – Tennis and paddle courts and Basque pelota court -Football pitches -

Swimming pools - Others

Pistas de padel, Campos detenis y frontón fútbol

Andalucía 53,3 4,9 25,0 13,1 3,7 100,0Aragón 35,7 2,6 52,9 7,8 1,0 100,0Canarias 66,2 0,3 24,2 9,3 0,0 100,0Cantabria 60,8 4,9 21,2 12,6 0,4 100,0Castilla - La Mancha 57,1 7,8 17,1 14,4 3,5 100,0Castilla y León 58,7 15,8 7,8 16,3 1,4 100,0Cataluña 57,7 0,3 29,0 12,7 0,2 100,0C. Madrid 66,4 3,4 25,1 4,6 0,5 100,0C. F. Navarra 30,2 20,9 12,3 36,4 0,3 100,0C. Valenciana 49,7 7,7 32,5 9,6 0,5 100,0Extremadura 60,2 2,5 9,0 28,3 0,0 100,0Galicia 63,6 0,8 14,3 20,3 0,9 100,0I. Baleares 16,3 1,0 59,0 22,5 1,1 100,0La Rioja 37,3 18,2 32,1 12,4 0,0 100,0País Vasco 55,7 19,3 16,2 8,7 0,0 100,0P. Asturias 54,0 4,7 34,1 6,5 0,7 100,0R. Murcia 50,6 3,0 32,8 13,1 0,4 100,0ESPAÑA 55,3 5,7 25,0 12,9 1,1 100,0

%Polideportivos Piscinas Resto Total

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

2008 2010 2008 2010Andalucía 73,2 80,7 62,9 76,8 Aragón 83,9 84,3 76,6 75,8 Canarias 74,6 81,9 61,8 62,8 Cantabria 78,3 81,1 68,5 69,2 Castilla - La Mancha 74,8 76,6 62,0 78,8 Castilla y León 79,4 83,1 68,5 68,8 Cataluña 83,1 84,5 75,7 77,3 Ceuta y Melilla 58,1 55,8 62,6 61,2 C. Madrid 85,2 89,4 80,1 80,1 C. F. Navarra 82,9 83,8 74,9 74,8 C. Valenciana 80,3 82,6 65,5 69,1 Extremadura 70,8 77,6 63,9 63,1 Galicia 83,8 82,4 69,3 72,0 I. Baleares 82,4 85,2 62,6 66,4 La Rioja 81,2 80,9 60,9 60,8 País Vasco 84,3 85,5 87,4 88,5 P. Asturias 82,2 82,1 66,2 65,2 R. Murcia 75,3 78,9 68,1 67,4 ESPAÑA 79,8 83,2 70,2 74,6

Grado de cobertura%Tasa de actividad

Mujeres 25-39 años

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

Part II

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, 2011Income Budget

Tax Exp. Budget

%

Personal Income Tax 35494 16636,9 46.9%

Corporate Tax 16008 3763,77 23.5%

Non-resident Income Tax 2540 1121,98 44.2%

Other Income 74 -

DIRECT TAX TOTAL 54116 21522,65 39.8%

VAT 24968 16978,13 68.0%

Excise duties 8179 1268,05 15.5%

Foreign Trade 1465 -

Tax on Insurance Premiums 1515 480,24 31.7%

Other 15 -

INDIRECT TAX TOTAL 36142 18726,42 51.8%

Tributes 1777 113,9 6.4%

TOTAL TAX INCOME 92035 40362,97 43.9%

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 44Period 1998 - 2004

Souerce: Eurostat: A statistical portrait p.203

women Men Diference W/M

Italy 308 73 235 422%

Spain 287 94 193 305%

France 268 123 145 218%

UK 262 123 139 213%

Finland 256 126 130 203%

Germany 260 131 129 198%

Belgiun 271 147 124 184%

Sweeden 239 142 97 168%

Private households with employed persons(OECD: Labour Force Statistics 1988-2008. Paris, 2009)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0

500

1000

1500

2000

thou

sand

s

Denmark

Mexico

Germany

Italy

Portugal

Spain

UK

Private households with employed persons

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.

Some budgetary measures taken under the crisis. A gender perspective Paloma de Villota.

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