The potential of Ukrainian
social insurance system improving
In
our opinion there are significant reserves to improve the effectiveness of obligatory
state social insurance system functioning videlicet: to analyze state social
insurance system as specific sphere of economic relations which originates from
insurance, has very close connection with insurance, but at the same time
differs from insurance considerably. Social insurance appeared as a result of
insufficiency of private-business insurance and the necessity of state
interference in order to overcome the market failures, which are typical for
private-business insurance. The problems of social justice and income adequacy
are especially actual in modern society. The problems of social justice and
income adequacy very often become sharper exactly as the consequence of some
social risks instance. Citizens’ protection against negative consequences of
such risks instance becomes the one of the modern state top priority tasks. At
the same time the socially oriented state needs more financial resources for
social problems solving. Moreover, such state needs precise regulation of all
the financial aspects, which ensure state social security commitments to
citizens. That’s why the importance of public and financial effectiveness of
state social insurance system becomes more and more advanced. Taking all the
above-mentioned into consideration it is necessary to underline that the study
of social insurance system effectiveness and the role of social risks and
insurance principles in frames of social insurance is especially actual.
In
modern science literature we can often come across the discussions on the
problem of improving the efficiency of Ukrainian social insurance system
functioning. As the method of solving this problem in some publications we can
meet the propositions to shift from social insurance contributions towards
social insurance taxes, and to set the new basis for calculation of social
insurance tax on behalf of employers, namely not the wages fund but sales
proceeds. But in our opinion, such method of solving the problem mentioned is
not acceptable.
Indeed,
exactly wages fund is determined as the basis for calculation of social
insurance contributions on behalf of employers, and such state of affairs is
absolutely reasonable but simultaneously contains some factors that negatively
influence the effectiveness of social insurance system. The specific character
of the mentioned basis for calculation of social insurance contributions lies
in following: employers have the significant motivation to suppress wages
growth and to use illegal ways of labour remuneration. It should be noted that
the general economic situation in Ukraine is characterized by negative trends
in sphere of labour remuneration. In conditions of insufficient opportunity to
get a job and low average wage level the significant part of economically
active citizens of Ukraine work abroad. In Ukraine high rates of employment
growth are observed only concerning people at the age of less than 20 years old
or more than able-bodied age. This situation is conditioned by growing demand
for low qualified labour force. Such state of affairs demonstrates the
regressive trends in national economy as a whole, because developed countries
are characterized by opposite tendencies, i.e. by the growing demand for high
qualified labour force. In addition, the share of wages in the structure of GDP
and production cost value still remains low and inadequate to worldwide
experience. This situation is connected with employers’ pursuit to win in price
competition, i.e. decrease prices by means of saving on wages level.
Taking
into consideration all the above mentioned, illegal ways of labour remuneration
will be still wide spread even under the change of basis for calculation of
social insurance contributions on behalf of employers (from wages fund towards
sales proceeds), because such situation is conditioned by economic reasons of
large-scale and deep character. Such statement may be proved by the experience
of Russian Federation, where consummation of single social tax was provided on
the basis of regressive taxation scale in order to stimulate employers’ refusal
from using illegal ways of labour remuneration. But the aim set was not
achieved, and as the consequence of insufficient receipts social insurance
system suffered from significant deficiency.
With
respect to the shift from social insurance contributions towards social
insurance taxes it should be noted that such shift is not acceptable, because
such shift fully contradicts insurance principles use in frames of obligatory
state social insurance. The categories “social tax” and “social contribution”
differ from each other with regard to such parameters as social-economic nature
and role in social protection system. Taxes may be characterized as
non-repayable payments, and social contributions correspond the form of wage
reserving in order to ensure payments in the case of the insured risks instance
(illness, industrial diseases and industrial injuries, unemployment, old age) and
may be repayable in the form of insurance disbursement. In
compliance with social insurance legislation it is prohibited to include social
insurance contributions into state budget as well as it is prohibited to use
social insurance contributions for the purposes not set in this legislation.
The shift from social insurance contributions towards social taxes may lead to
growth of state budget expenses necessary to support financial stability of
social insurance funds. Such state of affairs may lead to transformation of
social insurance system into social assistance system.
To
date the significant potential of Ukrainian social insurance system improving
consists of excluding from social insurance system frames insured persons
entitled to special benefits. It is necessary to underline that the necessity
to make payments for such insured persons destabilizes and unbalances obligatory
state social insurance system. Payments for such insured persons should be made
from the sources other than social insurance system. For example, people who
have harmful conditions working record
are pensioned off earlier than other groups of employees and their pensions
should be paid from corporate or professional pension funds. But it is
necessary to underline that shift of such financial burden from the social
insurance system onto corporate pension funds may be implemented only in
long-term perspective, gradually and without violence of mentioned groups
social rights.