Texte en français

  OUTCOME OF THE OECD MINISTERIAL MEETING ON SOCIAL POLICY
Paris 23-24 June 1998 
   TUAC EVALUATION

1. The main message of the TUAC Statement presented to Ministers was that globalisation, demographic change, mass unemployment, increasing economic insecurity, and changing family structures all pointed to the need for a new agenda for social policy. But the privatisation of social security systems would be a disaster - worsening inequality and increasing insecurity. Rather, governments needed to play a central role ensuring good public systems and integrating social concerns into all aspects of policy. 

2. The Ministerial meeting emphasised the role of social policy and showed scepticism concerning the claims of those who advocated radical privatisation. However, the need remains to raise the profile of social issues in the OECD and combat the growth of social exclusion and deprivation in OECD countries. Governments seemed more comfortable with treating social policy as essentially a question of the effectiveness of spending programmes in achieving specified objectives. 

3. Much of the debate was dominated by the impact of the ageing of OECD societies on pension schemes, following the publication of the OECD report “Maintaining Prosperity in an Ageing Society” at the time of the OECD Finance Ministers meeting in April. The TUAC delegation at the meeting recognised the need to modernise and reform pension schemes but insisted that this could not be based on the lowering of benefits. They also warned against an over-reliance on private or capital market schemes against the background of the Asian financial market crisis, in which many pension funds had lost money. Rather there was a need to protect and improve public pensions as an important part of multi-pillar systems. 
 

Issues debated by the Social Ministers 

4. The OECD Social Ministers Meeting, had as a theme “the new social policy agenda for a caring world”, reflecting the “Caring World” initiative taken by the government of Japan at the 1996 G7 Summit. Discussions at the meeting focussed on three main issues. 

5. Firstly, Ministers discussed the need for more “employment-orientated social policies”. The background for this was: - the increasing unemployment of unskilled workers; the growth in “precarious”, casual or contingent work; changing family structures and the growth of single parent households; the growing economic dependency of young people due to increasing periods of education and training. Within this the discussion centred on two issues: - the changes needed to existing policies in order to achieve effective employment-oriented social policies; and how policies could be made more family friendly, with the need to reconcile the requirements of paid employment and family responsibilities. 

6. Secondly, Ministers discussed the need for the long-term sustainability of social protection and in particular retirement pension systems against the background of the demographic trend towards ageing within almost all OECD societies. The two central issues were: - how could tax and benefit systems be “re-balanced” to alter individual choices on labour market participation over the over the life cycle; and could the long-term sustainability of pension systems be ensured? These questions were not developed in full. Instead, the debate centred mainly on the need to extend working life by increasing the effective retirement age, reversing the trend to earlier retirement. 

7. Thirdly, Ministers considered the issue of health care from the perspective of “readjusting chronic and long-term care”. The debate was dominated by fear that ageing could lead to an unsustainable increase in health and old age care expenditure. The questions submitted by the OECD Secretariat already expressed this suspicion. Issues discussed were the need to change the current institutional distinction between subsidised acute care provisions, institutional social care and cost-shared private home-care. At the same time there was concern at the cost implications for social insurance systems if paid care displaced informal and mostly unpaid provision within families or communities. Here, Ministers were asked by the OECD secretariat to consider the following questions: 

- How can dependence on formal care services and time in institutional chronic care be reduced? 

- What role should informal carers play, and how can they supported? 

- How should care for the frail elderly be financed?

8. Both BIAC and TUAC submitted statements in advance of the ministerial meeting. And took part in joint consultation session which preceded the opening of the meeting. The consultations were chaired by the Secretary of Health and Human Services of the United States, Donna Shalala. 

9. BIAC called for radical reform of social security systems based on the public financing of basic health and pension provision, but with the private sector delivering the services. They also criticised the level of taxation and non-wage labour costs, which they argued reduced employment in general. 

10. Leading the TUAC delegation, Rodney Bickerstaffe said that on the side of trade unions there wasn’t any doubt on the need to reform and safeguard social protection systems. TUAC had therefore submitted proposals to develop a new "Charter of solidarity" as a basis for reaching consensus for reform. With regard to persistent mass unemployment and globalisation he made it clear, that in the future more than at any other time, the welfare state and social policy were fundamental if governments wanted the global market system to develop. He called upon Social Ministers not only to promote employment friendly social policies, but also social friendly economic policies and warned against social policy being the ambulance for dealing with economic policy accidents. 

11. The TUAC delegation also criticised the obsession with the cost of social security systems, and the removal of social responsibility from employers. This couldn’t be the starting point for meeting the challenges of globalisation and ageing societies. The welfare state was not a barrier to economic dynamism and nor did it remove personal responsibility. Rather it was an essential investment for the future. Many of the financing problems of social security systems were in fact a reflection of the economic problems of unemployment. Increasing choice and employment opportunities for older workers might have positive economic and social effects. But at present, the necessary preconditions for such measures were lacking:- unemployment must be reduced; health and safety at the workplace must be improved; and new and better opportunities for the retraining of older employees must be provided. 

12. A further element of a response towards ageing societies should be the extension of individual choice instead of economic compulsion. The extension of working life should be one of voluntary choice by employees. It should be accompanied by efforts to develop a smooth path for a flexible transition from work to retirement. Decisions of older employees in favour of earlier retirement were often not due to a voluntary choice for increased leisure but rather an effort to escape the risk of becoming unemployed. 

13. The TUAC delegation also defended the public service ethos in the delivery of health and social services. A market oriented approach of health care and of old-age income did not produce lower costs or higher efficiency in delivery. TUAC again underlined trade union’s support to the modernisation of the welfare state to safeguard its future. The trade union movement recognised the need to play a pro-active role in efforts to modernise the welfare state by increasing its efficiency and its cost-effectiveness. Social and welfare concerns had to be integrated more effectively into wider economic and fiscal policy, labour market and educational policy, as well as family policy. Social policy could no longer just a question of expenditure programmes. A full and promising response to the challenge of ageing societies had to be based on the full involvement of the social partners. Social Ministers therefore were called upon to declare their intention to involve trade unions in the process of modernising social protection systems. 
 

Outcome of the meeting of the meeting of Social Ministers 

14. In the final communiqué of the meeting Ministers agreed: 

- that structural reform of social and health care systems should achieve greater equity  and efficiency of social protection systems; 

- to promote employment-oriented social policies to combat poverty, inequality and exclusion; 

- to ensure the best possible start for children by promoting early childhood development and family friendly policies which would help families balance work and caring responsibilities, and by improving employment opportunities for those parents without work; 

- to promote a healthier population by focussing on more prevention and the broader factors contributing to health improvements and by tackling persistent inequalities in health status; 

- that an active ageing strategy should encourage and enable people to lead productive and healthier lives as they age; 

- that necessary reforms of retirement pension systems should not be delayed, such that they provide adequate income support while ensuring their long-term sustainability; 

- to co-ordinate the role of health and social care systems so they provide appropriate and integrated care for those with long-term needs; 

- to promote an appropriate balance in rights, responsibilities and opportunities between government, at various levels, and individuals, families, social partners and communities; and 

- to support the elaboration of effective instruments for monitoring and evaluating programme outcomes, and to develop internationally comparable social indicators.

16. Concerning proposals to maintain prosperity in ageing societies, Ministers welcomed the OECD-report, which had been presented to Finance Ministers. They followed up the proposals to encourage people to work longer and to withdraw alleged incentives for earlier retirement, but moderated the proposal to shift public pension schemes towards mainly advanced funded systems. Instead, they declared that within multi-tiered pension systems, public pension schemes should continue to play an important role. Ministers confirmed also their commitment to involve the social partners in efforts to achieve the outlined goals of active ageing. The same commitment they expressed in relation to reforms of health care. 
 

Key points for trade union follow up 

17. The trade union movement will have to continue to contribute to debate on the future of social policy by promoting a vision of society based on solidarity in which the interests of young and old, healthy and sick, men and women are fully balanced. This must also be an inclusive vision without “insiders” and “outsiders”. This requires the continued development of new ideas on reform, as with changing employment conditions, systems are not currently attaining this vision. 

18. Trade unions also have a key role to facilitate a smooth transition from work to retirement by: 

- strengthening and broadening the scope of individual choices of workers concerning retirement; 

- negotiating around age-specific forms and ways of transition from work to retirement (e.g. age-specific part-time employment, implementation of transition facilitating working time accounts, company-based intergenerational employment pacts); 

- contributing to the improvement of health and safety at the work place; 

- fighting the discrimination against older workers.