The return of summer to the political scene will be marked by the negotiation of next year’s budgets. The Government must carry out these public accounts to ensure the stability of the legislative power and the first consensus will have to be sought within the coalition. Sumar already has a list of priorities with housing as a central axis: the coalition wants to propose the construction of 500,000 apartments for a monthly rent of 400 euros and to prohibit purchases that are not intended for the habitual residence. The new parental permits and measures to increase the purchasing power of families also appear in the document prepared by the minority partner.
Sumar’s priorities for these negotiations will be structured around three pillars. The first is the expansion of social rights, with the negotiation to increase parental leave as its main asset. Housing too, with a set of measures aimed at providing solutions to the poor application of the law approved in the previous legislature, with most of the autonomous communities controlled by the PP. And a battery of measures to alleviate the problems that inflation causes in the pockets of citizens. Although the indicator has decreased in the last measurements, it still remains at levels close to 3%.
Sumar is aware that the law passed in the last legislature to control prices will have little effect for now, since the PP is at the head of most of the autonomous communities, which have delegated power in matters of housing. None of these autonomies are considering applying it. The only one that has applied this rule is Catalonia, with ERC in the government, although everything indicates that the PSC will continue to apply it. For this reason, the coalition is proposing a series of measures that are in the hands of the central administration with the objective that rents do not exceed 30% of family income.
The most notable is the construction of half a million social housing units with affordable rent. And set a price: 400 euros per month. Sumar also wants the construction of these housing units to be located in so-called tension areas – where rents are at very high levels – and for their construction to be carried out by the state and not by real estate companies, as has happened so far with public housing. “It is cheaper if the state does it, like when building a hospital,” coalition sources say.
They also explain that the State is perfectly capable of developing this policy because it has the two necessary contributions: public land, in the hands of Sareb, Adif, Heritage or the Army; and financing. How does Sumar propose to finance this housing? Thanks to what is called the Addendum to European funds, which includes a line of subsidized loans. “We want to allocate 40 billion in subsidized loans from this amendment: during the first ten years, no interest is paid and then the interest is lower than the market rate,” they explain. This is a so-called budgetary-neutral measure since, according to its calculations, the payment of rents over a period of 30 years will be used to repay the bulk of the loan.
Mobilizing empty housing
The other policy that Sumar proposes to expand the social housing stock is the mobilization of all empty homes in the six main cities of the country – Madrid, Barcelona, Valencia, Seville, Zaragoza and Malaga. In a recent census, the INE asked the electricity companies for data on the energy consumption of all the houses in the country in order to locate those that are completely empty. In these six large cities, according to this calculation, Sumar proposes to relocate 900,000 people to the market. This is the State that acts as “owner” and is responsible for restoring the homes to put them on the market with affordable rents. They also propose progressive taxes to penalize those who insist on keeping them empty, so that they end up lacking economic incentives to participate in this program.
The coalition will also propose at this negotiating table to fiscally discourage tourist apartments to ensure that they are no longer profitable and to definitively end the “golden visa”, something that the President of the Government, Pedro Sánchez, announced a few months ago, but which for the moment has not materialized in the Official State Gazette (BOE). And finally, Sumar proposes to prohibit the purchase of homes that are not intended to be inhabited.
“Housing is not a productive asset, even classical economists, like Stuart Mill or Adam Smith, called rentiers an unproductive class,” says a source at Sumar, who is committed to channeling all this capital into truly productive activities, towards the green and digital transition.
Four weeks paid leave
Sumar wants to take advantage of these budgets to carry out some of his great campaign banners that were later included in the investiture agreement with the PSOE. One of them is the creation of a four-week paid leave to care for children under eight years of age. In the last legislature, the Government approved by decree a temporary unpaid leave of eight weeks, given the impossibility of applying the Family Law that provided for it. This year, the Executive gave the green light to the project that takes up the essence of this norm and includes paid leave for the first four, but to enter into force it must complete its process in Congress.
This permit is a requirement imposed by the European Union and should have come into force a few weeks ago. For this reason, Spain risks a fine of one million dollars. Sumar has been pressuring his partner for months to implement these permits and will seek to achieve this with this budget negotiation. The goal is to perpetuate the eight-week leave still in force and to pay the first four, despite the fact that the unions have demanded that the entire leave be paid.
For this negotiation, Sumar also wants to include a universal parental benefit to combat child poverty. Coalition sources assure that this type of policies are the most effective if we consider an international overview and give the example of Poland, with a lower child poverty rate than Spain despite a lower GDP per capita, thanks precisely to a similar measure.
Increase purchasing power
Although the Spanish economy continues to grow above expectations, inflation remains at high levels. In July, without going any further, prices rose by 3.1%, although this figure is a minimum in almost three years. The problem, Sumar points out, is that once the rise in raw material prices has subsided, businessmen across the chain have not reduced prices.
In an attempt to assimilate household purchasing power to these increases, the coalition proposes sending information from the Observatory of Business Margins to the collective bargaining tables so that unions have detailed information on the advantages of each sector and can negotiate salary updates under better conditions.
Recently, the PNV and Junts rejected a non-legislative initiative from Congress that claimed to promote this measure, although Sumar recalls that it does not need the approval of the Chamber and that a collaboration agreement between the Ministry of Finance and Labor and Social Security is sufficient.
Sumar also calls for a tax on excessive margins of companies throughout the production chain, which would be “adaptive” depending on the evolution of these margins. If they continue to increase, the tax will increase and the opposite will happen if the margins decrease until they disappear if they return to pre-pandemic levels.
Raise revenue with new taxes
To finance some of the measures included in this package, such as the four-week permit, which represents a significant expense, Sumar proposes to increase certain taxes to increase the state’s revenue reserve or to eliminate certain tax exemptions: for example, to tourist accommodation, private universities and aircraft kerosene.
As on other occasions, Sumar is asking to make taxes on energy companies and banks permanent, but this time he is adding an extra figure: a special tax for large estates, similar to the one that already operates for large fortunes. “There is a way to continue adjusting and graduating the solidarity tax on large fortunes and we propose to extend it to large estates as well,” Sumar’s sources say. This tribute managed to raise 623 million euros in its first year of operation.
