Modernisation of social protection systems and in particular of social insurance financed from employee contributions is an urgent condition for an effective social system which is affordable over the long term. Very high and increasing contribution rates – caused by demographic developments – which feed directly into even higher statutory non-wage labour costs are poison for the competitiveness of companies, economic growth and employment.
The economic framework conditions for the ability of the German social insurance system to function have changed permanently with European integration and globalisation of the economy. German business has to come to terms with increased competition for investments and jobs. That calls for a reduction in the labour costs paid by companies. In particular, statutory non-wage labour costs are too high and constitute a major competitive disadvantage for the German economy.
The largest long-term challenge for social insurance systems is the demographic trend. This applies not only for pension insurance but in particular also for sickness and care insurance. The ageing of the population – ever fewer people paying contributions and ever more people drawing benefits – requires unfunded benefits to be reduced and collective financing to be supplemented by individual funded risk insurance.
Rebalance the relationship between solidarity and subsidiarity
For that reason, BDA advocates – in its positions and publications – that the benefits financed by all branches of social insurance should concentrate on basic protection and that other elements should be financed by individuals themselves. This is possible without detriment to social protection and without placing excessive financial demands on individuals, not least because a reduction in compulsory deductions creates additional room for manoeuvre.
The relationship between solidarity and subsidiarity must once more be brought into balance. Solidarity should only come into play where individuals are unable to help themselves. The greater emphasis on the principle of subsidiarity creates not only greater fairness in benefits but also means that the welfare state will be affordable in the long term.
Benefits not covered by insurance – insofar as the legislator accepts that they are necessary – must be financed out of general taxation and should not be financed by social insurance contributors.
Wage-related contributions can only be justified insofar as the benefits are also wage-related. In statutory sickness and care insurance, this is not the case. Accordingly, the financing of these branches of social insurance should be decoupled from the work relationship. To this end, a system of premiums should be introduced. Low-income households would receive state subsidies.
Harmonisation of social protection in the European Union cannot and should not be an objective of European social policy. It runs counter to the principle of subsidiarity and contradicts the need to promote and preserve a plurality of life and organisation forms.
Each individual national system is directly influenced by the performance of the “economy of the member state in question, which still diverges considerably. Furthermore, these systems are an expression of the societal and institutional situation in an individual country. For this reason, too, they cannot be harmonised.