Social protection has great potential to reduce income inequality, it was underlined at a debate hosted by Oxfam and featuring the OECD, ITUC and Development Pathways at the European Development Days event 2019 in Brussels this week.
The discussion focused on how the financing of social protection schemes can contribute to a solidarity-based society in which the strongest shoulders carry the biggest burden. The panel was held to discuss the two domestic sources from which to finance social protection – contributions through labour and general taxes. It was important to better understand these funding mechanisms and their potential impact on the redistribution of wealth within a society, according to moderator Hilde Van Regenmortel, the Thematic Officer — Active Citizens for Social Justice at Oxfam.
Stephen Kidd said that to address inequality, it was vital to consider both coverage of schemes and the way that social protection is conceptualised. As long as schemes are designed or presented as ‘programmes for the poor,’ they will meet with far less general acceptance than when coverage is universal, he argued. His presentation proceeded to outline the fiscal sustainability of inclusive social protection schemes, citing the example of Uganda, where Development Pathways provides technical support to the Expanding Social Protection programme.
He said that the work there demonstrated that, given economic growth and given appropriate phasing, a low-income country could reach a target of spending 1.5% of GDP on social protection by 2030 in order to meet the Sustainable Development Goals. The comments were made in the week after the IMF pointed to the redistributive potential of social protection, and come after Development Pathways launched a new training course on making the case for inclusive schemes in a range of political contexts. A recording of the full European Development Days debate is available — see left.