Istalia

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The great welfare reform: Saragat government's plan for a more equitable country

After years of wild liberalization, the Democratic Socialist Party launches a historic reform to guarantee universal and inclusive welfare

The headquarters of the ANPS, already housing the fomer National Board for Social Services created after the fall of the Socialist Republic

October 5630

ROMULA - Ten years after the devastating Patriotic War of Liberation, the country has changed profoundly compared to the Socialist Republic, from all points of view, economic, social and not least demographic.
The population has experienced a rapid demographic boom, also driven by the incentives introduced by the previous national-liberal government, and in ten years has grown by over 3 million people, exceeding 158,900,000 people. The economy, which has returned to growing at a sustained pace, has allowed a rapid reconstruction of the productive fabric, but has also generated strong inequalities. The abandonment of communism and the rapid liberalization of the economy has allowed the wild development of a private market that has enjoyed strong deregulation. Healthcare, education and the social security system have become unequally accessible, penalizing those who could not afford expensive private services and were forced to turn to the poorly funded and underfunded public system.

Now, with the electoral victory of the Democratic Socialist Party and the installation of the Minister Imperial Secretary of State Annalisa Saragat, the wind is changing. The new executive has announced a general structural welfare reform that aims to strengthen and modernize the existing public system, to offer a universal service that guarantees quality services and reduces the inequalities created by the uncontrolled growth of the private sector.

One of the cornerstones of the reform is the strengthening of the universal public healthcare system, inherited from the communist era but which for years remained underfunded and understaffed. The government will reform healthcare in the National Health System (SNS - Sistema Sanitario Nazionale) which will define general healthcare policies while operational management will be entrusted to the Regional Health Services (SSR - Servizio Sanitario Regionale), which will manage public hospitals, specialist care and general practitioners, and to the provinces and municipalities which will be responsible for home care, rehabilitation, prevention and care for the elderly.
With regard to general practitioners, organized after the fall of communism as freelance professionals contracted with the state, Saragat government has decided to proceed with a sensational U-turn with general practitioners who will return to being public employees. Despite the protests raised by the National Association of Istalian Doctors, the government has continued on its path, determined to introduce greater control but above all greater uniformity and equity of services in all areas of the country. Together with this reform, the Community Health Centres will be introduced, structures that will bring together in a single neighbourhood or small town location family doctors, specialists, nurses and social workers and therefore the Health Care Units to accommodate patients with low-intensity care while hospitals will be reserved for the most serious cases.
A measure that has partly reassured doctors and their trade associations, the Government will invest significant resources to increase the number of doctors, nurses and structures, but above all to guarantee more competitive salaries to attract professionals and improve the efficiency of the service. At the same time, the private sector, which in recent years has transformed into a jungle of expensive and often inefficient insurance, will be subjected to new regulations to avoid abuse and discrimination and the possibility will be introduced for private structures to enter into agreements with the state to make up for the possibility of long waits at public institutions.
The existing national specialized centers (for Heart and Cardiovascular Diseases, for Mental Health, Oncological care, for Respiratory Problems and Diseases and for Stomach and Urinary Tract Diseases), introduced under the Seventh Republic, will be decentralized so as to create similar specialized departments in each Regional Health Service.

Regarding public education, while with the reconstruction programs higher education, specialized education and job training have seen strong investments, education at lower levels has continued to suffer for years from underfunding and a flight of teachers to the private sector that has seen the multiplication of private and confessional schools and colleges, and it is precisely these latter, largely managed by the Aurorian Church, returned with great fanfare after communism, that are criticized for having turned into schools "for the elite", and a notable case is the "Eliasite Comprehensive Institute of the Holy Apostles", attended by the children of the city's elite, of many politicians and high national officials and also by the members of the Imperial family. The government will increase the salaries of public teachers and will implement a hiring plan to improve the quality of teaching and reduce overcrowding in classes. Investments in school infrastructure, today many simply dilapidated, will also be strengthened, which will include large green spaces, spaces for sports and for artistic, creative and technical activities.

On the social security front, the new government has reformed pensions with the establishment of a three-level system, of which the first two are mandatory.
Managed by the National Social Security Agency (ANPS - Agenzia Nazionale della Previdenza Sociale), the new agency superseeding the National Board for Social Services, the Basic Public Pension (PPB - Pensione Pubblica di Base) will be universal, with a fixed amount that decreases as income increases, and will be financed through general taxation.
The PPB will be flanked by the Complementary Occupational Pension (POC - Pensione Occupazionale Complementare), which will depend on the earnings and duration of the worker's contributions. It will be mandatory and financed through mandatory contributions from both employers and employees. The POC fund will be managed by ENPS and the accumulated sums will be invested in a diversified manner, with a mix of stocks, bonds and other financial instruments.
Finally, the third pillar of the new pension system will be represented by voluntary private pensions, although the government has provided tax incentives for those who opt for complementary private pension funds.

The reforms introduced by the Government also include a strengthening of collective bargaining, incentives for the development of corporate welfare with a large role for workers' representatives in determining these policies, therefore, the measure among the most criticized by the opposition and the employers, the introduction of a guaranteed minimum wage to combat poor work, which has become a problem especially in the most depressed areas of the country. Unemployment benefits and job reintegration programs will also be strengthened, to ensure a system more resilient to economic fluctuations.

Regarding welfare aimed at families, the ongoing demographic boom has highlighted the need for more incisive policies. The previous national-liberal government had already introduced support measures, but the Saragat government intends to strengthen them: paid parental leave will be expanded, with greater equity between fathers and mothers, and economic aid for those with children will be increased. The plan to build a network of public nurseries across the country will be launched, and access to nurseries will be guaranteed free of charge to low-income families, while progressive payment mechanisms will be introduced for others. Incentives will also be introduced for companies that adopt work-life balance measures.

To finance this ambitious reform, the government has announced a review of the tax system that has generated the most criticism from the opposition. In fact, a more progressive taxation will be introduced on the highest incomes and large fortunes, as well as a tax on the extra profits of large companies. Furthermore, the fight against tax evasion will be strengthened through digital tools and transparency incentives.

Regarding the long-term sustainability objectives of the new welfare system, despite long debates, the provisions to reform the Istalian Strategic Investment Fund, the sovereign wealth fund of the country that with alternating fortunes has survived the passage of time, exploited in various ways by the various governments and regimes that have succeeded one another over time and greatly impoverished during the last years of the Socialist Republic, have not been included in the law presented to the National Congress. The Government, declared Annalisa Saragat, has decided to dedicate more time to study and develop the measures involving the Strategic Fund which, once restructured and reformed after the socialist experience, will return to have as its objective that of saving for the future, to strengthen the economy, and to improve the quality of life of Istalians, so as to also be able to support the welfare system and stabilize it in times of economic crisis. It is expected that the Council of Minister will deliberate in two months ready to present the reform of the Found to the Congress were it is expected to be approved rapidly by the consistent PSD majority.

According to Annalisa Saragat, this reform and those that will follow will mark the beginning of a new era for the country and with these words expressed before the Congress while presenting the reform we can summarize the reform's objectives:

For too long we have lived in a system where well-being has depended on the economic capacity of individuals. Our goal is to guarantee rights and opportunities for all, building a more equal and cohesive society.

The reactions of the opposition have been mixed: the New Communists and Sovereign Istalia have guaranteed their support for the reform, although, especially the Communists, continue to support a greater reduction in the role of the private sector to ensure greater equity and social justice; the Hosian Democratic Union split during the vote, a lot of its members criticizing the measures that will hit the activity of the Aurorian Church on the field of education, while the National Liberal Party has already announced a fight, arguing that the reform risks suffocating economic growth with excessive tax pressure while the state will have to bear very high costs that will take resources away from other projects.
However, popular support for the new government is strong and the country seems ready to turn the page towards a more inclusive and sustainable development model.