The Social Security Institution's 'municipality' insistence: Incentives account for 14 percent of revenue

Labor Economics Expert Prof. Dr. Aziz Çelik wrote an article regarding the recently debated SGK debts of municipalities. Çelik's article, titled "Available for capital, not for the municipality!" in BirGün, contained striking details.

Stating that the SGK has provided 1.3 trillion liras in incentives to employers over the last 4 years, Çelik said the following:

MUNICIPAL DEBTS ARE 3 PER THOUSAND

The Minister of Labor and Social Security immediately made a statement on his official X account. According to the Minister's statement, the SGK debt of municipalities has reached 96 billion TL. According to the Minister, the debt of the five most indebted municipalities is 19.1 billion. The debt of the Istanbul Metropolitan Municipality (İBB), which has a population of 16 million, is 3.3 billion!

If the SGK's estimated 2024 revenues increase by 50 percent compared to 2023 (they will increase by at least this much), it will be 3.3 billion TL. Therefore, the ratio of the debt in question to the 2024 SGK revenues will be around three per thousand. Let's round it up. Let's say it's around half a percent. The ratio of the alleged debt of the İBB to the SGK barely reaches one per thousand of SGK revenues.

SGK HAS GIVEN 14 PERCENT OF ITS REVENUE AS INCENTIVES

Aside from the fact that the amount of municipalities' debts to the SGK is a drop in the ocean, the SGK is in a position to tolerate these debts. The SGK provides massive support to employers. In other words, the SGK does not collect a portion of the premiums it should collect from employers and, in some cases, provides additional incentives.

With 16 separate employment incentives and supports provided by the SGK, private sector employers who employ insured workers under the 4/1-(a) scope are provided with the opportunity to benefit from insurance premium incentives, supports, and discounts included in various laws. These amounts are not insignificant. The amount of SGK support provided to employers in 2023 alone is 206 billion TL at current prices. Considering that the total revenue of the SGK in 2023 was 1 trillion 184 billion, it can be seen that incentives equal to 14 percent of SGK revenues were given to capital.

'THIS IS THE SOLUTION'

In his article, Çelik also drew attention to T. Sabri Öncü's proposal, stating; "The Treasury pays the municipalities' SGK debts with long-term and low-interest bonds. The municipalities' debts would also be wiped out. I agree with Professor Sabri's view. If a solution is being sought, this is the solution. Otherwise, what is being done means tying the hands of the municipalities," he said.