We are
through a period of deep reforms in Spain, one of the countries more affected
by the crisis.
Shame that we were not prepared for this. Because when policy moves this fast, the odds favor a short term vision. It becomes difficult to distinguish between the immediate and the long term needs of a country.
To illustrate this, we can focus on two measures taken to balance the Spanish public sector accounts, one on the revenue side and the other on the expenditure front.
On the former, a short term key policy decision has been the amnesty to tax evaders.
There is little evidence showing that this will have a significant impact on tax receipts. Nevertheless, many countries, including Germany, have taken similar measures and, even if the impact is small, some additional revenue will be generated, which might be sufficient for the government to confirm the success of this measure.
However, this should have not been the end goal. Whether you agree or disagree with this policy decision, the government has lost a key opportunity to use it as a starting point of a new culture that rejects the tax evader. This could have been done by launching a public campaign about the importance of this issue, strengthening monitoring and auditing of companies and individuals and implementing big punishments for those who evade.
It is inconceivable in Sweden to find someone that does not pay taxes. It is rightfully considered unjust and anti-social. And this is not intrinsic to Swedes. A Spaniard in that country will behave similarly. In the current context, creating this culture is more important than ever.
On the expenditure side, now take public sector employees. They have been identified as a key area of reform in the short term.
Measures are oriented to reduce their number and their salaries with a lack of focus on whom and what function they perform; in other words, Does a teacher adds the same value to the economy than a public employee at the registry counter? Should we act equally on both?
There is little doubt on the need to reduce the cost of the public sector, but policy needs to be more analytical and sensible. While reducing the salaries of teachers may have an impact on the public sector deficit, it is arguable whether in the medium and long term this is the right policy decision.
Strengthening our education system should be a priority - if not the priority - of our society. We need to ensure that the next generations are the best prepared to face the challenges coming from a more global society.
The inability to take the right long term policy measures that will ensure the economic and social development of our country will impact negatively our ability to build a sustainable future.
Yes, analysis takes time and acting fast is essential when you are under a lot of pressure to cut the public deficit. But thinking slow is also key. Finding sustainable policies that contribute to the country's growth should be the end objective of government.
There is no short term reform that should not come together with a plan to tackle the country's problems in the medium and long term, being this tax receipts, the size of the public sector, education and health or pension reform.
The absence of a plan and a comprehensive policy program is damaging the ability to create a stronger society to face the future challenges and sustain all the achievements to date. And we should consider the impact of this on our future generations.
Shame that we were not prepared for this. Because when policy moves this fast, the odds favor a short term vision. It becomes difficult to distinguish between the immediate and the long term needs of a country.
To illustrate this, we can focus on two measures taken to balance the Spanish public sector accounts, one on the revenue side and the other on the expenditure front.
On the former, a short term key policy decision has been the amnesty to tax evaders.
There is little evidence showing that this will have a significant impact on tax receipts. Nevertheless, many countries, including Germany, have taken similar measures and, even if the impact is small, some additional revenue will be generated, which might be sufficient for the government to confirm the success of this measure.
However, this should have not been the end goal. Whether you agree or disagree with this policy decision, the government has lost a key opportunity to use it as a starting point of a new culture that rejects the tax evader. This could have been done by launching a public campaign about the importance of this issue, strengthening monitoring and auditing of companies and individuals and implementing big punishments for those who evade.
It is inconceivable in Sweden to find someone that does not pay taxes. It is rightfully considered unjust and anti-social. And this is not intrinsic to Swedes. A Spaniard in that country will behave similarly. In the current context, creating this culture is more important than ever.
On the expenditure side, now take public sector employees. They have been identified as a key area of reform in the short term.
Measures are oriented to reduce their number and their salaries with a lack of focus on whom and what function they perform; in other words, Does a teacher adds the same value to the economy than a public employee at the registry counter? Should we act equally on both?
There is little doubt on the need to reduce the cost of the public sector, but policy needs to be more analytical and sensible. While reducing the salaries of teachers may have an impact on the public sector deficit, it is arguable whether in the medium and long term this is the right policy decision.
Strengthening our education system should be a priority - if not the priority - of our society. We need to ensure that the next generations are the best prepared to face the challenges coming from a more global society.
The inability to take the right long term policy measures that will ensure the economic and social development of our country will impact negatively our ability to build a sustainable future.
Yes, analysis takes time and acting fast is essential when you are under a lot of pressure to cut the public deficit. But thinking slow is also key. Finding sustainable policies that contribute to the country's growth should be the end objective of government.
There is no short term reform that should not come together with a plan to tackle the country's problems in the medium and long term, being this tax receipts, the size of the public sector, education and health or pension reform.
The absence of a plan and a comprehensive policy program is damaging the ability to create a stronger society to face the future challenges and sustain all the achievements to date. And we should consider the impact of this on our future generations.
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