In the run-up to the Spanish General Election on December 20th 2015 (20D), promises are flowing like so much cheap cava. But just what are the main Spanish political parties promising for freelancers, or autónomos as they are known here? It’s well known that freelancers get a bad deal in Spain, but what might change – aside from better access to credit, which all promise – with a new government?
What Spain’s political parties are promising freelancers
The Partido Popular (The “PP”)
This centre-right conservative party currently governs Spain with an absolute majority but that looks set to change on the 20th of December. However, they are still the leading party according to the polls. They have already offered several sweeteners to freelancers: a reduction of the standard income tax rate from 21% to 15%, for example, or from 9% to 7% for new freelancers. The PP have also extended the social security bonus. A major bone of contention for freelancers is the obligation to pay a minimum of around 260€ per month towards social security, whether the freelancer has earned enough to cover that or not. Under the PP a scheme which gradually introduces this rate over a period of 18 months, starting from around 50€ a month for 6 months, has been extended to all new freelancers (previously there was an age limit for this bonus). If voted in again, the PP have promised to extend this 50€ a month rate from 6 months to a year. However, it seems that although it might take longer for freelancers to reach the full minimum social security contribution, there are no plans to reduce this or relate it to earnings. Meanwhile, the PP have pledged to allow freelancers to delay their payment of sales tax (IVA) to the government until after they have been paid by the client. Up until now, the IVA had to be paid irrespective of whether the client had settled their bill or not. (Note: it appears there are no plans to reduce the hefty 21% top rate of IVA).
Partido Socialista Obrero Español (The “PSOE” or Socialist Party)
The PSOE, a centre-left party along the lines of Britain’s Labour Party and similarly out of government since the beginning of the economic crisis, have announced that they will link social security payments to earnings, stating that “it is unfair that freelancers always have to pay the same to Social Security, without taking into account how much they earn” (it was also, it should be noted, unfair when the PSOE were last in power). They are also promising to allow the social security tax to be paid every three months rather than every month, “to allow payments to be better adapted to seasonal or temporary activities”. Other pledges of the PSOE include a law of second chances for failed freelancers. and the extension of current employment creation benefits and subsidies to freelancers who wish to form cooperatives or other businesses in which employment is generated for others.
A new party which is alternatively regarded as central, centre left, centre right or even extreme right depending on who you ask, the “C’s” as they are known have echoed the PSOE’s pledge to tie social security contributions to earnings. They have also said that for freelancers who bill less than minimum wage (€648.60 per month), monthly social security contributions will be replaced by a yearly payment in which 7.2% of net earnings will be deducted. In other words, autónomos on low incomes will not need to fork out a fixed rate each month. Do they have any chance of winning? Well, according to the latest polls, they are neck and neck with Podemos (see below) to be the third most voted party and may therefore be key in the formation of any coalition government, given that a pact between the two poll leaders – the PP and the PSOE – is highly unlikely.
Podemos (“We Can”)
Another new party which is challenging the bipartisan grip that the PP and the PSOE have had over Spanish politics since the transition from the Franco regime. Regarded as “extreme left” and “Bolivarian” by its detractors, and as a more inclusive but nonetheless radical social democratic party by its supporters, Podemos have been fourth in most polls but are now experiencing a resurgence which puts them third. Having taken surprise wins in the mayoral elections for Madrid and Barcelona recently, as well as in the last European elections, the jury is still out regarding their chances of success. Podemos have adopted more of the measures recommended by the various freelancer associations than any other of the four main parties. These include a progressive social security contribution related to net earnings for those earning above minimum wage; below, no contribution will be required. Freelancers will be able to contribute less if they work less than full time, and can choose whether to pay up monthly or quarterly. Podemos, like PSOE, are also looking to establish a “law of second chances” to reduce the burden of debt for those freelancers whose businesses fail, and have a similar policy to the PP regarding IVA: freelancers will not be obliged to pay this until the client has settled their bill.
So, who should freelancers vote for in the Spanish general election?
Well of course we’re not going to tell you how to vote! In fact, this question is a moot one for many freelancers in the language teaching sector. Simply put, if you don’t hold Spanish nationality, you can’t vote in the general elections. But whether you can or not, or are perhaps able to persuade someone who can, it’s clear that there are much needed changes in the offing. Let’s only hope that whoever does get in can make good on their promises.
The cooperative SLB offers its freelancer members support with accounting, billing, legal paperwork, training, marketing and materials. Non-freelancers can also benefit, and if you’re willing to take the plunge and become autónomo, we’ll help you out with the bureaucracy. On this website you can check out our services in more detail, read about our objectives and find out how to join us.