The basis of a social security system: equal access to basic rights
Interview with Wu Ritu, vice chairman of Financial and Economic Affairs Committee of the 11th NPC
Chinese Social Sciences Today (CSST): Access to social security is in every member of society’s vital interest, and is the cornerstone of societal stability. The Report of the 18th National Congress of the CPC introduced higher standards for future social security system reforms. From your perspective, what is the most pressing issue in establishing social security?
Wu Ritu: After twenty years of dedicated work, a social security system covering China’s population of 1.3 billion people is already in its initial stages of establishment, but it still has a long way to go. According to the spirit of the 18th National Congress of the CPC and objectives mentioned in the Twelfth Five-year Plan, it is much more significant to guarantee institutional fairness, overall urban-rural coordination and sustainable development. Among these, institutional fairness is not only the benchmark for measuring co-ordination in urban-rural development, but also the fundamental precondition for sustainable development. Therefore, I think we must pay much more attention to institutional fairness.
At the beginning, our social security system only covered government employees and state-owned units; however, it was extended to cover employees in the private sector and ultimately to encompass our entire nation, from urban to rural areas, and from trade unions to residents. In the time since the majority of the population received benefits from varying levels of social security, the disparity in levels of basic security has gradually become a pronounced issue. Not only is there a gap between workers and residents in the cities and those in the countryside, but there is also inadequate coordination between districts within the same region, leading to different standards of social security within the region. The disparity between three systems—basic medical insurance for urban employees, basic medical insurance for urban residents and the new cooperative medical coverage system in rural areas—is obvious as well. Additionally, degree of coverage for local work-related injury insurance, maternity insurance and unemployment insurance is significantly different, and the voice for achieving fairness and equal coverage nationally is growing.
This requires a transition in social security policy from simply ensuring that every have access to some social security, to ensuring that everyone has access to a fair and equal degree of coverage. The essential requirement of social security system is equality—that is, that each citizen has an equal access to basic rights of social security treatments provided by the nation. For this reason, much more attention should be paid to the equality of the basic social security system, to the step by step realization of urban and rural residents’ basic pensions, and to strengthening basic medical insurance provided by social security in order to reach a fair and balanced level of access to social security benefits nationally.
CSST: What is your opinion on the new rural and urban residents’ pension system? Which part should be developed or improved?
Wu Ritu: In the past two years, the trial program for the new rural and urban residents’ pension system has developed rapidly. However, there are a lot of problems in implementation, such as lower coverage levels and residents’ less enthusiasm for enrolling in this new insurance in some places. According to regulations and basic pension standards determined by central authorities, the central government offers full subsidies to central and western regions and 50% subsidies to eastern regions. By the end of the August, there were 432 million people enrolled in these two insurance programs and 118 million people receiving pensions, indicating that, at present, the system has largely achieved full coverage. The central government has devoted a huge amount of money toward achieving this degree of coverage and also encouraged contribution from local finances; the system has developed rapidly, and the results are already evident. However, low-income regions cannot afford the extra subsidy for the pension on the basis of ￥55 subsidized by the central government, which leads to disparities in coverage between different regions. As of now, the trial program has finished and we are in the next step—the advanced stage of implementing the social security system. In this stage, the emphasis is balanced growth of pension levels for both peasants and urban residents, no matter whether they are in low-income or high-income regions. However, most importantly, this stage should obey the rule “do within one’s capabilities.” Our goal here is to establish a pension system with stable growth and to ensure its integration with the labor unions’ pension system.
The Chinese version appeared in Chinese Social Sciences Today, No. 391, Dec. 12, 2012
(Translated by Zhang Mengying)
Chinese link: http://www.csstoday.net/Item/36837.aspx