SocDems confused: Farmers putting them into a terrible situation

The Social Democrats felt pressured to a corner: after adopting a Labour code which allows to fire employees easier, they lost the elections to Parliament but now the coalition partners Farmers and Greens are encouraging to start with essentially the same document from July just with the amendments agreed in the Tripartite Council.

They are surprised by the persistence of the Prime Minister Saulius Skvernelis to prevent any amendments to the Labour Code, even those that would improve the public image of politicians. As the most important thing is the raw principle, to adopt only the changes agreed in the Tripartite Council and nothing else. It is asked to suggest the amendments after July.

“I do not understand such stubbornness of the PM” said a Social Democrat, adding that at least a some amendments, which are given by President Dalia Grybauskaitė, would improve the situation but the PM refuses to listen.

On Wednesday there was a joint meeting between the Social Democratic Party and Farmer and Greens Union Group, where the Social Democrats expressed their concerns. They tried to ask Linas Kukuraitis, Minister of Social Security and Labour, and PM S. Skvernelis , how the Farmers and Green are going to present the Labour Code to the general public, when in society it’s negatively evaluated, and how the income inequality is going to be reduced, which was emphasised by the European Commission.

It is known that the European Commission noted in a report that income inequality in Lithuania is one of the largest in the European Union and has been increasing since 2012. This is caused by the large employment gap of low and high skilled people, large pay differences, and limited progressivity of the tax system and the weakness of social security system. The European Commission thinks that that income inequality encourages emigration. And here Lithuania is the leader.

However, the PM and the Social Democrats say that they did not hear many instruments to reduce income inequality.

For example, L. Kukuraitis stressed that along with the Labour Code, other legal acts will be adopted, which increase unemployment benefits and their payment will will be extended from 6 to 9 months.

According to the Unemployment Insurance Act, the 1-3 month the changing pay will be about 50 percent of the previous average income, 4-6 month – 40 percent, 7-9 month – 30 percent.

Constant payments will reach 30 percent of the minimum monthly salary.

However, all payments will have a “ceiling” that is not going to be higher than 75 percent of the average wage in the country. Also, the benefits will be taxed by the personal income tax (PIT) and social insurance (SI) payments, which right now doesn’t exist.

According to the Social Democrats, the PM also stressed that income inequality could be reduced by giving “child money”.

S. Skvernelis said that income inequality could be reduced if taxes and payments of employer and employee would be merged into one, and also the increase of non-taxable income (NPD). As the politicians say, the Prime Minister has mentioned an idea to have exemptions for investments to the company’s technological modernization, although the Social Democrats did not understand how it would reduce inequality. What was surprising, that the PM hopes that employers will voluntarily share their increasing profits with the employees increasing profits just because it’s a responsible thing to do.

Peasant spokesman of the Farmers Tomas Tomilinas publicly and privately quite openly says that the new Labour Code is good for business, but according to his idea, the business agrees to commit to increase wages for workers.

Social Democrat Artūras Skardžius at a joint meeting listened to other coalition members, how were they going to explain the Labour Code to the public, and the adoption of it President Dalia Grybauskaitė called a lack of humanity.

“I asked what is new compared to our proposed draft. It was a question to the Minister since according to the business representatives, the Labour Code is no different and we are suggesting more or less the same as before the elections. As a result, we lost them because of future fears… The competition clearly used that. The answer of the coalition partners and the Minister was that, after the Tripartite Council trade unions gained more rights, while in the following sentence the PM admitted that a small percentage belongs to unions” says A. Skardžius.

“The coalition partners told us that despite the fact that the Labour Code has very little changes, which would defended the weaker side, it’s necessary for business. Supposedly has said the business assures that the companies will add more rights and guarantees into agreements with the employees” said the Social Democrat.

A. Skardžius said that he was always for the new Labour Code, but he sees that the coalition partners are going to make the same mistake like the Social Democrats did.

Rasa Budbergytė, another Social Democrat, says that she tried to ask how the Farmers Greens are going to reduce income inequality and social exclusion. She considered that when adopting the Labour Code the governing part has to offer something good to the citizens.

“We received a partial answer” said the politician and added that as of 2018 they are planning to increase the benefits, which haven’t changed for many years, and to pay more child money.

“Since the other Ministers did weren’t there, the questions weren’t fully answered”, – said R. Budbergytė.

The former Minister of Finance said that it’s still unclear whether the coalition partners are ready to put more taxes on the income from capital.

DELFI reminds that the Social Democrats are going to discuss their position on Labour Code on Saturday during a congress but the new party chairman Gintautas Paluckas suggests them not to make the same mistake. It’s true, the former Prime Minister Algirdas Butkevičius remains with his old approach, that the Labour Code is very useful.

The Parliament after the proposal has agreed to the amendments that were decided in the Tripartite Council but because of them the Conservatives, the Liberals, and Order and Poles abstained from voting. If the Social Democrats changed their mind, then the Farmers might not have enough votes to approve the amendments.