Get to know first-hand the reality of small entrepreneurs in our country and also the difficulties that self-employed workers and SMEs continue to suffer after a year and a half of pandemic and restrictions on economic activity. The president of ATA, the majority association among the self-employed, has been fighting for months to find real solutions and help that help businesses stay open. “The closures in Spain have not been supported by the administrations, but have fallen on the backs of the self-employed and companies,” he says. Amor refers to an increase in activity and consumption during the summer, but calls for “prudence” and emphasizes that it is still not possible to speak of recovery: “We have to see how next autumn progresses,” he warns.
This same week, the president of the Community of Madrid, Isabel Díaz Ayuso, has announced that she will legislate to eliminate own taxes in the region, does it seem like a successful model?
The fact that the Community of Madrid will not have its own taxes is an important message for citizens, but, above all, for companies that want to invest. You have to look for tax models like those in Madrid or Andalusia because they have been shown to work. They are friendly communities with their citizens, freelancers and companies. It has been shown that more is collected and that good services are provided; but, in addition, the shadow economy rate in Madrid is well below that of the national average. We are not willing to support a model of fiscal hell in which citizens, companies and the self-employed are punished and with which the underground economy is promoted.
What is the balance of economic damage since the pandemic began? Has the Government of Pedro Sánchez been up to the task?
This pandemic has severely punished the self-employed, who have been one of the groups hardest hit by restrictions and limitations on activity. They have done it with great suffering, but the self-employed have been able to endure. The action of the Government would divide it into two parts: a series of measures that have served and that have helped to maintain employment and the business fabric, such as ERTE, aid for cessation of activity or the ICO credit line. But, there are other aid in which the Government has failed, as with the recent direct aid of 7,000 million euros, since nine out of ten self-employed cannot access them because they are poorly designed. They are called direct aids but they leave out SMEs or freelancers with losses in 2019 and those who have been paying day by day with many efforts since they only allow to cover the pending invoices to May 31st.
Is the Government open to introducing changes to extend the application period for direct aid?
We have denounced that, for example, in Madrid, there have only been 36,000 applications, not concessions, with 414,000 freelancers. In Andalusia, only 33,000 applications have been registered with 560,000 freelancers. This highlights the cumbersomeness of the royal decree and that the self-employed will not be able to justify these aid and that, therefore, they have not requested it for the most part. This is because they have no outstanding debts as of May 31, 2021 or because there are SMEs that have had losses in 2019. The problem is that there will be practically half of the 7,000 million euros left over. The Government is in time to rectify because we have already transferred it and, not only ATA, but also Cepyme and the autonomous communities have shown that this royal decree is poorly designed.
Has it been done better in other countries than in Spain?
Of every 100 euros that a self-employed person or a company has stopped billing in Spain, the administrations have helped them with 20 euros, an amount that includes all the aid, also the ERTE. In Germany, for every 100 euros that a self-employed or a company has stopped billing, the German government and the rest of the administrations have helped them with a total of 75 euros. The closures in Spain have not been supported by the administrations, but have fallen on the backs of the self-employed and companies.
The August employment data shows a loss of 7,358 self-employed workers, how do you interpret this decline?
You have to be very careful with your employment, affiliation and self-employment data. The growth in the number of freelancers in the last year has been 50,000 more, but we also have more than 226,000 self-employed workers collecting the cessation of activity at the end of August, that is, about 8,000 more than in July. The loss of 7,500 freelancers in the month of August is not good news and that is why we must be cautious. The pandemic has taken its toll on the self-employed and small businesses. There have been many months of restrictions and you have to see how economic activity evolves, I do not want to be triumphant, but realistic. There is a recovery in activity and consumption, but it is a very slow process that must be consolidated. We have to be cautious, as we have to see how next fall progresses.
Will there be an agreement to extend the ERTE beyond September 30?
As long as the limitations continue, the ERTEs have to be maintained because in some sectors the activity cannot yet be carried out with total normality. For example, limited capacity is maintained for many businesses. The same happens with the cessation of activity of the self-employed. There are 150,000 freelancers who are on the wire and if you push them a little, they fall. There are also companies with their workers in ERTE and difficulties because they cannot dissolve those companies nor can they fire their workers. In these cases, a solution must be found so that these companies can close protecting their workers.
Negotiation is also pending on the adequacy of the contributions of the self-employed to real income.
Today you can quote for real income, but you are not letting go. A self-employed person over 48 years of age who has a net income of 3,000 euros per month cannot contribute for 3,000 euros per month, since his base is capped at just over 2,000 euros. With which, a self-employed person is not allowed to quote for real income. It should have started here, by making the contributions of the self-employed more flexible so that they can adapt their contribution to real income. From ATA we will always defend that the million self-employed whose income does not reach the minimum interprofessional salary contribute less. What we are not willing and we will not endorse in any case is that there will be a rise for more than one and a half million quotes. In ATA we are not going to be accomplices of a rise in prices for a million and a half self-employed. If they want to do it, let the politicians do it. The self-employed are not going to pay for today’s party without knowing what will happen to their pensions tomorrow. We will negotiate and talk what needs to be said, but the self-employed already pay a lot in contributions from themselves and their workers, in taxes, fees or payroll. Of every 100 euros that a self-employed person earns, more than 80 euros will be paid taxes, fees, contributions or expenses.
Will the summer campaign help to restore normalcy for business?
We are at a time of significant rebound in consumption, which has been dammed for months by restrictions and lack of mobility. However, we cannot speak of recovery yet: we have stopped falling and we are recovering activity and mobility little by little, but it is a one-off rebound in consumption and we must be very cautious and see how autumn progresses. There are more than 226,000 freelancers who continue to charge the cessation of activity, there are sectors that continue with restrictions and others that remain closed. Vaccination is increasing, but we must see how the virus progresses In addition, the economy is encountering tricks such as the rise in energy and electricity costs, as well as the increase in fuel and the high rate of inflation, which is now in 3.3%, that is, at levels not seen in nine years.
What added costs will the rise in electricity and fuel mean for the self-employed?
The rise of electricity is a scandal and the Government is overwhelmed in search of culprits instead of looking for solutions. Possible point solutions would go through charging only for the energy consumed and for parking taxes and fees. This would be temporary, until an energy reform comes along. The cost for businesses is clear: if a deep fryer is plugged in today in a restaurant, this costs twice as much as last year and if a hairdryer is installed in a hairdresser, it is twice as well. In other words, there are businesses that are paying twice for electricity than a year ago, with increases close to 200%. An average self-employed person has paid 250 euros more for electricity in July and will pay 300 euros more in August. This is as if the self-employed had to pay two more installments to Social Security and it is a drag.
What other problems will freelancers face this fall? From ATA you have already warned of an increase in fees by the SMI.
Many freelancers do not know what will happen with the autumn or with the cessation of activity or with the ERTEs that expire on September 30. The increase in the minimum wage will mean an increase in labor costs due to the rise in the SMI and an increase in fees from three to 12 euros. In February of this year an agreement was reached with the Government because an update of the rates and an increase in quotas from three to 12 euros per month had to have entered into force. It was agreed that it would not apply until the minimum wage was touched. But, if it goes up, this will mean an increase in the fees.
A hot autumn is coming in which key reforms such as the second part of the pension or labor reform will be addressed.
Regarding pensions, the Government will have to seek the sustainability of the pension system and guarantee this right for future generations of pensioners. Regarding the labor reform, we are clear that there are aspects of the labor framework that must be improved, such as youth employment or trying to work to end the duality of the labor market. What we are not willing to do is that companies and freelancers that generate employment lose the necessary flexibility and more at this time. To relate temporary employment with precarious employment is to ignore the reality of our labor market. Not for working eight days at the Seville Fair with a temporary contract or as a waiter for three months in a Sierra Nevada ski resort does one have to have a precarious job. You can work temporarily without having a precarious job.
What is your opinion of the first part of the pension reform? Will the future sustainability of the system be guaranteed?
The first part of the approved pension reform is still the approval by the social partners of what the politicians ruled in the Toledo Pact. From my point of view, it is clearly insufficient for a simple reason: it is true that today’s pensioners do not lose purchasing power; but Today’s contributors, who will be tomorrow’s pensioners, remain in limbo without knowing if they will have to work more years or what their pension will be. I think it is a very short-term reform, today’s pensions have been guaranteed, but there is still a long way to go to guarantee the pensions of those who are contributing today.