The unified social tax and its impact on social policy in Putin's Russia

Abstract

'At present, 70% of the Russian population are entitled to a large variety of social benefits. Estimates based on data from service suppliers and government agencies paying social benefits put the number of benefit receivers at about 100 million. The current system of social benefits and benefit payment mechanisms has limited potential for redistributing resources to those who need them most. In addition, Russia does not have an adequate system of accounting for social payments and benefit provision, which creates problems in defining the responsibilities of both benefit providers and recipients. Trying to push towards greater efficiency of social policy, while cutting overall spending (a goal shared at present by all welfare states, East and West), the Putin administration has so far focused specifically on three objectives: centralization of financial resources allocated for fulfilling social guarantees (e.g., elimination of off-budget social funds); redistribution of the social-support burden between various levels of government on the one hand, and employees and employers on the other hand; provision of social benefits on the basis of targeting (means test). With the stabilization plan in 1998 measures to achieve these goals have been incorporated into the government's social and economic reform strategy. In July 2000, the government approved the 'Strategy of Russia's Development in the years 2000-2010' (the so-called 'Gref Plan'), which emphasizes the need to improve the efficiency of the social insurance system. The introduction of the Unified Social Tax, and therefore the reform of the collection and distribution of financial resources allocated for social payments, represents a central part of this strategy. This paper presents an analysis of the introduction of the Unified Social Tax. We ask what the main changes are in the areas of financing and collecting social security contributions, and how these changes affect social policy reform in the fields of pensions, health, and employment. In the first section (Social Policy 1999/2000: Starting point for the second wave of reforms), we will describe the legacy of the Yeltsin era, the starting point for the second wave of reforms in social policy. Section two (The Unified Social Tax: basis for funding) gives an overview over the newly introduced social tax and the related political debate. This new method of collecting social insurance contributions directly affects three areas of social policy: pensions, health, and employment. In section three (Specific social policy fields), we outline current reforms in each of these three fields. The last section (findings) sums up the main findings and evaluates the implications of the Unified Social Tax for Russia's current social policy. Up to now there are no academic studies which describe or analyse the Unified Social Tax and its implications. As a consequence, this article relies heavily on up-to-date information provided by Russian media, statistics, and interviews. Moreover, we would like to point out one particular limitation of this work. This article takes a 'state-centralistic' approach. We therefore largely ignore the role and contributions of non-state actors, as well as of Russia's regions and their relations with the federal centre in the provision of social policy.' (extract)Der vorliegende Beitrag untersucht die Einfuehrung der einheitlichen Sozialsteuer in Russland. Die Autoren fragen nach den wichtigsten Veraenderungen in den Bereichen der Finanzierung von Sozialversicherungsbeitraegen und danach, wie sich diese Veraenderungen auf die sozialpolitischen Reformen bei den Pensionen, dem Gesundheitswesen und der Beschaeftigungspolitik auswirken. Im ersten Abschnitt wird das Vermaechtnis der Jeltsin-Aera beschrieben, das den Ausgangspunkt fuer die zweite Welle von sozialpolitischen Reformen markiert. Abschnitt zwei gibt einen Ueberblick ueber die neu eingefuehrte Sozialsteuer und die damit verbundene politische Debatte. Diese neue Methode des Sammelns von Sozialbeitraegen beeinflusst direkt drei Bereiche der Sozialpolitik, naemlich Pensionen, Gesundheit und Beschaeftigung. In Abschnitt drei umreissen die Autoren gegenwaertige Reformen in jedem dieser drei Felder. Der letzte Abschnitt fasst die wichtigsten Ergebnisse zusammen und wertet die Implikationen der einheitlichen Sozialsteuer fuer Russlands gegenwaertige Sozialpolitik aus. Da es bisher keine wissenschaftlichen Studien zur Sozialsteuer gibt, beruht der Artikel zum grossen Teil auf aktuellen Informationen, die von russischen Medien, Statistiken und Interviews bereitgestellt werden. (ICDUebers)German title: Die einheitliche Sozialsteuer und ihre Auswirkung auf die Sozialpolitik in Putins RusslandAvailable from http://www.forschungsstelle.uni-bremen.de/publikationen/ap/AP34.pdf / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekSIGLEDEGerman