NIEUWSBRIEF VAN DE VERENIGING BASISINKOMEN
nummer 18 december 1996
issn: 09243038
Inhoudsopgave
Basic income in the Netherlands 1994-1996
1. High hopes for basic income
2. Anticipating the 1996 discussion: three alternatives and three objectives
3. 1995-1996: dampening of euphoria
4. The non-governmental Left: tax credits and basic benefits
5. The discussion on basic income: pragmitism and experiments
References
Literature
BIEN. Actuele visies op het basisinkomen
Basic income in the Netherlands 1994-1996
Prepared for BIEN International Congress 1996, Vienna, 12-14 September, Session "Country Surveys"
1. High hopes for basic income
After the social-liberal coalition had finally been installed (september 1994), hopes of a serious role for basic-income on the agenda of social security reform were raised high. 1 The coalition was formed, following four months of tough negotiation, on a compromise plat form of drastic cuts in government expenditure, priority for satisfying the criteria for membership of the European Monetary Union, boosting labour participation, and a much-publicized announcement to evaluate, and discuss the future ot: the social security system in the summer of 1996.
In December 1994, Hans Wijers, Minister of Economic Affairs, said in an interview that he believed that "we are inevitably moving towards something like a basic income", and that basic income is a rational way of combining the dynamism and flexibility of the labour market with the kind of minimum income security which is considered a sign of civilized society by many in the Netherlands. Even though Wijers later wisely declined to elaborate on these comments, they sparked off a rather intense media debate during the first half of 1995 on the pro’s and con’s of the unconditional grant, in which another coalition prominent - Gerrit Zalm, Minister of Finance and former Director of the Central Planning Bureau - reiterated his sympathy for basic income as a low-cost way of overhauling the elaborate Dutch social security system.
To be sure, opponents of basic income within the coalition, such as the social-democratic Minister of Social Affairs and Employment Ad Melkert, were quick to register their disagreement in no uncertain terms. Melkert, whose name nowadays graces no less then three newly created types of subsidized jobs wrote: "the freedom that basic income seems to offer amounts to a definitive separation of outsiders from insiders on the labour market". 2 To calm down things, Prime Minister Kok had to state that basic income cou1d not be ruled out in advance, and was to be seen as one of several possible alternatives in a future discussion (though not necessarily in 1996, under responsebility of the present Cabinet).
2. Anticipating the 1996 discussion: three alternatives and three objectives
Nonetheless, the debate of the ensuing months in the media crystallized into a rough consensus on the probable shape ofthe 1996 agenda. 3 According to most commentators, any viable system of social security wou1d at least have to combine the following three desiderata:
The three alternatives were seen to be
In this anticipation of a debate to come, it seemed c1ear that the basic income alternative would stand a good chance of becoming a serious candidate for reform. With its drawback of high cost mitigated by gradual introduction, the system promised to combine the three abovementioned objectives in the most simple and effective way. Despite the vehement objections of Melkert, The Chrisitan-Democratic opposition, and VVD-leader Bolkestein, this rather optimistic view was generally considered to be the realistic one in early 1995 by leading Dutch newspapers, against a background of sombre speculation on the long term-prospects of fu1l employment.
As an editiorial in NRC Handelsblad (23-12-1994) remarked after citing the participatory advantages of unconditional income (especially its removal of the poverty trap) the idea of basic income "erases the conventional thought that social benefits are merely temporary, in anticipation of one’s next stable job. This message is difficult to stomach, and politically difficult to get across. lt touches the ethical core of our welfare state."
No doubt emboldened by the statements of Minister Wijers, D66 held a well prepared consultative conference on the "feasibility and desirability of basic income" in March 1995.
The conference showed a marked split between the party membership and the parliamentary fraction of D66, the former essentially displaying the view described above, while the latter, as voiced by economic spokesman Bert Bakker, considered a basic income to be too costly, inferior to subsidizing jobs in terms of labour participation, and of doubtful justice. According to Bakker, the euphoric response of the majority of speakers was the "saddest thing I experienced during twenty years of party membership."
At the conference, Wijers firmly restated his preference for a basic income, adding however that it could be introduced only during a long-term process, in which the Dutch labour force would have to become more entrepreneurially oriented, and shed its culture of educating workers into lifetime employees. Wijers: "We should try and see how we can use the system of basic income to promote the creativity of people. The current system does not stimulate this, on the contrary, the benefits of social assistance tend to put a brake on creativity." 6
3. 1995-1996: dampening of euphoria
However, by the time of the annual review of the budget in september, it became apparent that the social-liberal coalition did not really intend to start preparing for a fundamental reform discussion in the summer of 1996. In retrospect, it seems to have made its choice for the first of the above-mentioned alternatives - a streamlined version of the existing system with emphasis on job subsidizing - well in advance. This could be read most clearly from the official publication on employment and social policy (Sociale Nota 1996). The tenor of this influential document is aptly summed up by chapter titles such as: "Work, Work, Work", "Searching for employment" and "A Working Social Security". As mentioned above, Minister Melkert has become the champion of subsidized jobs. 7
He initiated an elaborate plan to create 40.000 public sector jobs for long-term unemp1oyed (estimated cost: 1.6 billion guilders), provide legal opportunities for employers to hire longstanding unemployed below the statutory minimum wage, and conduct experiments with different forms of workfare. 8
Though even Melkert himself admits that these schemes are indeed costly and have run into serious implementation problems besides, the climate of response has been mildly favorable and prepared to grant the benefit of the doubt for the time being.
As far as workfare is concerned, the imposition of sanctions by local benefit centres on those unwilling to take part in a schooling or job "trajectory" has been made possible by the new law on Social Assistance (Bijstandswet), adopted in January 1996. The new law considerably tightens work requirements.
Categories previously exempt, such as single mothers with children over five years of age now asked to search a job or accept some form of public employment. Also, the income norm for single persons has been lowered to 50% of the family social minimum, with discretionary powers for local centres to provide supplements for the needy. 9
Finally, other parts of social security have downscaled by building in additional means-testing (provisions for widows and next of kin), or are in the process of being scrutinized for further cost-cutting and work incentives (wage-related insurances for sickness and disability).
In response to demographic pressures, the Cabinet has just recently announced a plan to supplement the contributions for financing old age pensions with tax monies, thereby shifting the burden toward the richer pensioners, a quite sizeable group. 10
Of course, not all of these developments can be placed unambigously in the first category of policy alternatives. 11 Yet it can hardly be denied that the current govemment is involved in a extensive reconstruction job on the existing system, and that it is wasting little time. lt is therefore not surprising to see the promised reform discussion recede into the future as a result of the coalition’s legislative activism. Two recent signs of political adjustment to the new facts are that Frank de Grave, the newly appointed liberal underminister of Social Affairs, recently stated his preparedness to let go the idea of a "mini-system" (exit, possibly, the second alternative on our list). 12
Also, the annual party conference of D66, held in March 1996, withdrew much of its previous support for the basic income reform strategy, retaining only the promise not to close the door on the idea for good, in a way reminiscent of the 1994 PvdA election program’s "no-regret" stance of keeping open the basic income option (exit, for the time being, the third alternative). 13
In sum, the likely removal of a grand govemment-sponsored public debate on social policy also seems to have reduced basic income’s high hopes of figuring prominently on the political agenda of the next few years. This may be a blessing in disguise, however. For the more serious attention paid by different political parties to basic income proposals after the idea gained respectability (following the Central Planning Bureau’s 1992 study) has also revealed that the Dutch electorate may still be massively in favor of retaining the features of the existing system, and is in any case largely committed to the ethic of paid work. 14
If social policy in the Netherlands does not shift too rapidly in the direction of the austere mini-system, as it does not seem ‘to be doing currently, then the prospects of basic income might be better safeguarded than if the issue were to be decided once and for all at the 1998 election polls. 15
4. The non-governmental Left: tax credits and basic benefits
On the non-governmentalleft (the Green party GroenLinks, and the Trade Unions), the period under consideration was marked by reticence to take active part in the media confrontation between ‘pure models’, such as described in section 2 above. However, both quietly developed new proposals which might be seen as first steps towards a genuine basic income.
In its platform for the 1994 election, GroenLinks had already announced a plan to turn the personal income tax exemption into a small refundable tax credit (DH 280 per month for each adult). In November 1995, its Executive Committee decided to relabel this as "foot income", and raised the amount to DH 500 per month, financed additionally from environmental taxes. Then, for its June 1996 Congress, the party proposed to raise the foot income another hundred guilders, to reach about 2/3 of the current minimum income for a single person (see also BIEN Newsletter 24). The party seems to be undecided whether it wants to proceed along the route of gradual introduction of a "full" basic income at social minimum level, or stop at an updated form ofthe 1985 WRR plan for a partial basic income. This now famous proposal, which was summarily rejected at the time, would deliberately fix a basic income at a low level, and supplement it by work-conditional benefits, up to the social minimum. The WRR partial basic income also resembles the current Green plans by stressing the need for alternative tax bases, notably production or eco-taxes.
The union approach to basic income has always been concerned with participation. In a discussion paper launched at the end of 1995, the Trade Union Federation FNV critically reviewed the social-liberal governments’s performance on social policy as an intoduction to a new proposal. In the form of a refundable tax credit, their so-called basic benefit ("basisuitkering") would again start by replacing the income tax exemption, and then rise up to 50% of the minimum wage (currendy DH 960) in 2010. Like a basic income ("basisinkomen"), it would be an individualized entitlement, whose size does not depend on family earnings, but unlike basic income, it would be restricted to people who either have a job, actively seek paid work, or are engaged in caring work within the family. The basic benefit plan was favorably reviewed by the Central Planning Bureau, which praised its effects in creating jobs in lower segments of the labour market (NRC Handelsblad, 7-2-1996).
Within trade union circles, the plan may well represent a compromise between longstanding opponents and advocates of a pure basic income. In fact, the plan closely resembles the UK proposal for a "participation income" developed by leading economist Tony Atkinson in 1992. Seen from a strategic perspective, such proposals may constitute a different route to a full basic income. Instead of starting with a small unconditional income which is then raised to cover basic needs, this strategy starts by making a basic needs-covering income accessible subject only to the most entrenched of all conditionalities, the ‘reciprocal’ requirement of willingness to work. At this moment, the FNV is involved in a major reorganisation, merging four or five of its large market sector unions (possibly including the Voedingsbond, a timehonored proponent of basic income.) It will be interesting to see whether the innovatory approach of the FNV in promoting a basic bene:fit will survive these organisational changes.
5. The discussion on basic income: pragmitism and experiments
Despite the continuance of a principled debate on the moral desirability of unconditional income grants 16, the state of the discussion in the Netherlands during the period has been largely pragmatically oriented, with a close focus on empirical questions that bear directly on the political chances of introducing (some kind ot) basic income (within some time span). These qualifiers in parentheses are important, given the proliferation of forms and transitional scenarios, only some of which have been discussed in this survey.
This new wave of pragmatism can be illustrated by reference to a recurrent theme in the next context of debates on partial versus full basic income. The theme may be labled the "dilemma of financial cost versus social protection". According to leading opponents, such as Minister Melkert, a partial basic income will offer insufficient social protection, whereas a full basic income would be financially prohibitive, and moreover protect groups who do not need to be protected in the first place. The response of basic income advocates to this putative dilemma raises complicated issues, which will have to be sorted out in the coming years. 17 First of all, it may be said that a partial basic income (whether seen as permanently partial, or as a stage on the way to a full basic income) does not stand on its own. Rather, it is to be regarded as the unconditional component of a new system which offers social protection up to an agreed-on level of social minimum, and which is more in line with the diverse realities of a modern labour market. However, this response admits that the beneficial effects of the unconditional component, as well as the total cost of the new system - including its "supplementary" and conditional part - will ultimately depend on the question of the desired level of the social minimum over time. For it is the latter - and unresolved - issue which decides what a "full" basic income would ultimately amount to (for instance measured as a proportion of disposable income per capita) 18
Secondly, as became abundantly clear once again at the Conference "A Future Welfare State with Basic Income" held by the Dutch Society for Basic Income (Vereniging Basisinkomen) in February 1996, the behavioural impact of any given basic income level crucially depends on the method of its financing, in particular the incidence on labour cost. 19 This point is usually overlooked by those who put forward the dilemma. However, this second response reveals another problem for the basic income movement: the existence of a strategic trade-off. Either one tries to finance an unconditional grant by the traditional means of higher marginal rates of income taxation, implying acceptance of adverse effects on labour supply, hence a lower sustainable level of the grant. Or one goes the ambitious route of trying to introduce basic income along with a radical change of taxation and financing of social security, implying better prospects of sustaining a high level of basic income, but at the cost of having to provide independent arguments for two fundamental reforms at the same time.
With respect to the long-term impact of a basic income on behaviour, an interesting discussion took place between professional economists in "Economisch Statistische Berichten", in early 1995. Following an admirably clear exposition of basic income’s potential advantages, professors Lans Bovenberg and Rick van der Ploeg (who also figures as the financial spokesman of the PvdA in Parliament) took position against the proposal with a sophisticated form of the above mentioned "dilemma of cost versus protection". In that context, their most provocative thesis is that over time, the introduction of a substantial unconditional income in the form of a negative income tax - which would offer adequate social protection but imply high marginal tax rates - will undermine the incentives of young people to invest in skill and education, leading them to take up undemanding and often undeclared small jobs during their formative years. Accoring to the authors, "these developments threaten the most important capital good in a knowledge-intensive society: the human capital and the work discipline of future generations" .
The thesis is not entirely new, and was swiftly attacked by the economists Paul de Beer, Jan Nelissen en Steffen Polk. 20 Yet the exchange of views is politically significant, because it shows that the state of the discussion on basic income among economists is shifting from the familiar short-term effects on labour supply to more qualitative (and necessarily speculative) long-term effects. This signifies that the economist’s debate on the more conventional issues has been waged with some success by those who have promoted basic income over the years, and is now shifting to more difficult issues which would not have arisen at all, failing this succes.
In their response to Bovenberg and Van der Ploeg, Nelissen and Polk (1995a) rightly stressed the need to take account of the empirical evidence on schooling and skill formation, assembled in the Negative Income Tax-experiments. These were held in the USA during the sixties and seventies. 21 This leads me to a positive note on which to conclude this survey of developments in the Netherlands: the real prospect of staging a Dutch experiment in the near future.
On the basis of a detailed proposal developed by two members of the Basic Income Society’s research group, Paul de Beer and Loek Groot, the Greens in the city of Dordrecht are currently in the process of persuading the city council to conduct a real-life experiment with a basic income scheme. The possibility of such experiments has been financially opened by one of the Melkert workfare subsidy schemes (see section 2 above). This experiment, planned to run for a two-year period, aims to compare the labour market behaviour of a control group staying within the present system with a group of workers and c1aimants who would face a basic income scheme giving them the same net income but permitting them to freely combine their basic income with their preferred mix of paid and unpaid acitivities
Robert J.van der Veen
Department of Political Science
University of Amsterdam.
Author’s adress:
Vakgroep Politicologie
Universiteit van Amsterdam
Oudezijds Achterburgwal 237
1012 DL AMSTERDAM
The Netherlands
Phone: (+) 31 205254783
Fax: (+) 31 205252086
e-mail: A71503RV@homs.sara.n1
For the survey of developments in the Netherlands between 1992 and 1994, see Boerlage, 1994
References
Literature
BIEN. Actuele visies op het basisinkomen
De "call for papers" ten behoeve van de 6e internationale BIEN conferentie, die op 12-14 september 1996 in Wenen gehouden werd, heeft ruim vijfentwintig reacties opgeleverd. Een aantal hiervan was afkomstig van niet-Europese auteurs, hetgeen leidde tot opmerkingen als zou BIEN niet meer moeten staan voor "Basic Income European Network", maar voor "Basic Income Earth Network" of "Basic Income Electronic Network".
Deze laatste suggestie heeft ongetwijfeld te maken met het feit dat BIEN inmiddels op het Internet over een website beschikt (http://www.econ.ucl.ac.be/ETES/BIEN/bien.html) (Vindt U dit te lang? Gebruik dan als zoekterm: vanparijs) en dat men de BIEN-Newsletter via Internet kan aanvragen op het e-mail-adres: vanparijs@espo.ucl.ac.be.
Ook de Vereniging Basisinkomen heeft overigens sinds kort een mailadres: basic.income@pi.net. Aan de homepage van de Vereniging wordt nog gewerkt.
De artikelen van de niet-Europese auteurs kwamen uit Brazilië, Argentinië, Israël, Amerika en Nieuw Zeeland.
In Brazilië heeft de senaat in 1991 bijna unaniem een wetsontwerp goedgekeurd dat strekt tot invoering van een gewogen basisinkomen voor personen boven 25 jaar die een inkomen beneden een bepaald bedrag hebben (ongeveer 240 US dollars meer dan tweemaal het minimumloon per maand). Het heeft de vorm van een negatieve inkomstenbelasting en de hoogte bedraagt 30% (zo mogelijk later te verhogen tot 50%) van het verschil tussen dat bedrag en hetgeen de ontvanger zelf verdient. Dit zou neerkomen op een gemiddelde van 47 US $ per persoon per maand en 25% van het nationaal inkomen vergen. Het Braziliaanse Huis van afgevaardigden heeft nog niet over invoering van de wet gestemd.
De Argentijnse auteurs bepleiten een basisinkomen voor kinderen. Dit is bedoeld als eerste stap in de invoering van een algemeen basisinkomen, maar meer nog als middel om beweging te krijgen in de vastgeroeste ongelijke verhoudingen in de Latijns-Amerikaanse landen. Deze landen kampen behalve met armoede ook met "inkomensconcentratie". De rijkste 10% van de bevolking verdient meer dan 50% van het nationaal inkomen, en de armste 40% van de bevolking verdient daarvan gezamenlijk nog geen 10%. In 1989 was deze ongelijkheid het grootst ter wereld in Brazilië en nu in Guatemala (Zuid-Afrika is tweede). Zij brengt met zich mee dat de allerarmsten gedwongen zijn hun kinderen te laten werken zodra die daartoe in staat zijn. Die kinderen volgen geen onderwijs, worden uitgebuit en blijven tot de allerarmsten behoren, op hun beurt gedwongen om hun kinderen zo snel mogelijk te laten werken.
Zo is in Latijns Amerika niet alleen rijkdom, maar ook armoede erfelijk. In Brazilië wordt in dit verband geëxperimenteerd met sociale bijstand voor ouders die er voor zorgen dat hun kinderen onderwijs volgen. Is er teveel schoolverzuim, dan stopt de uitkering. Een basisinkomen voor kinderen zou kinderarbeid voorgoed tegengaan en hun opleiding zeker stellen. Geleidelijk zou de "basisinkomen-gerechtigde" leeftijd steeds verder kunnen worden verhoogd.
Israël kent een tijdelijk basisinkomen voor immigranten. Het is een uitkering, ruim boven het sociaal minimum, voor de duur van een jaar, bestemd voor immigrerende Joodse families, die ongeacht hun inkomen, woonsituatie, rijkdom of bereidheid om cursussen Hebreeuws te volgen verstrekt wordt. Deze uitkering, tot stand gebracht omdat in 1989 de opvangcentra de toevloed uit de voormalige Sowjetunie niet aankonden, was aanvankelijk wel aan dergelijke zaken gekoppeld. Waarom de regeling later vereenvoudigd werd is niet duidelijk. Wel was de uitkering altijd al mede gebaseerd op de overweging dat een immigrant beschouwd kon worden als een "rationele en autonome persoon, in staat om zonder inmenging van buiten af om te gaan met zijn of haar problemen en verwachtingen". Het rechtse kabinet dat deze gulle regeling invoerde had zelfs geen moeite met een verhoging van de inkomstenbelastmg van 5% die nodig was om het ontbrekende deel van de kosten bijeen te brengen. De auteurs wijzen er op dat deze uitkering iets geheel anders is dan een basisinkomen, maar dat er ook overeenkomsten zijn. In de praktijk blijkt het voor een rechts kabmet mogelijk te zijn een onvoorwaardelijke en ruime uitkering aan "rationele en autonome personen" in het leven te roepen die een belastingverhoging met zich meebrengt. Waar een wil is is een weg.
Uit de Verenigde Staten van Amerika bereikte BIEN de tijding: "Tom Paine Was Right! Basic Income Must Come From Ground Rent (Basic Income Without Land Tax Will Fail)." Dit is de titel en strekking van een artikel dat de ideeën van Thomas Paine en Henry George introduceert. Trouwe lezers van deze Nieuwsbrief zijn al bekend met deze ideeën, die overigens ook in Nederland veel aanhangers hebben. Ook in Nieuw Zeeland is er een verbond van voorstanders van een basisinkomen, UBINZ geheten (Universal Basic Income, New Zealand). De afgevaardigde hiervan schreef een artikel, waarm het huidige belastingstelsel in zijn land bekritiseerd wordt. Dit stelsel wijkt niet veel af van dat in de Europese landen. Invoering van een "flat tax" van 33% en afschaffing van de belastingvoordelen voor mensen met hogere inkomens zou een basisinkomen van meer dan 6000 NZ dollars per jaar mogelijk maken. Niemand zou er daarbij op achteruit gaan. Bij een flat tax van 43% zou een basisinkomen van meer dan 9000 dollar per jaar mogelijk zijn (ongeveer f 12.000,-).
Het overgrote deel van de ingezonden artikelen kwam natuurlijk gewoon uit Europa. Maar hierover later meer.
Gosling Putto