2023-12-12 23:02:36
The Minister of Economy, Luis Caputo, communicated this Tuesday through a message recorded in the Treasury Palace, an economic emergency package that aims to reduce the fiscal deficit, something already anticipated by President Javier Milei. The official maintained that the aim is to organize the economic variables and avoid hyperinflation.
“Today we are receiving the worst inheritance in our history. A country where Argentines are increasingly poorer, without any fiscal, monetary or exchange anchor. Spending, issuance and the exchange rate are out of control. If we continue as we are, have no doubt that we are going to hyperinflation and that, as the President also said, we can see the highest numbers in our history of up to 15,000% annually,” Caputo indicated.
For this reason, the minister stressed that the economic emergency package “has the objective simply of eliminating the catastrophe and getting the economy back on track.” Along these lines, he anticipated that National State labor contracts “that are less than one year old will not be renewed; “A common practice in politics is to incorporate family members and friends before the end of a term of office.”
In addition, he said that electricity and transportation rates will rise as a result of the reduction of energy and transportation subsidies.
One by one, the measures that Caputo announced
These were the main announcements of the Minister of Economy:
1) Employment contracts are not renewed in the State that are valid for less than one year.
2) Suspension of the national government guideline for one year.
3) Reduction in the number of ministries and secretariats.
4) Reduction of ATN to the provinces.
5) Elimination of public works tenders and suspension of the execution of those tendered that have not yet started.
6) Reduction of energy and transportation subsidies.
7) Freezing of the Enhance Work in values 2023.
8) Official dollar at $800. Increase in the PAIS Tax on imports and withholdings on non-agricultural exports.
9) Replacement of the SIRA with an import system without prior authorization.
10) They double the allowance per child and increase the Alimentar card by 50%.
He said that “the suspension of the National Government’s program for one year” will be decreed and specified that “during 2023, between the presidency and the ministries, 34,000 million pesos were spent on the program.” “There is no money for expenses that are not strictly necessary and much less to support with money from average taxpayers that are created only to praise the virtues of the governments in power,” he added.
Along the same lines, Caputo pointed out that the Ministries and Secretariats will be reduced from 18 to 9, from 106 to 54. In this way, the Minister indicated that this measure represents “a reduction of more than 50% of the hierarchical positions of the politics and 34% of the total political positions of the National State.”
In relation to discretionary transfers from the National State to the provinces, Caputo maintained that they will be reduced “to a minimum” and added that these are “resources that, unfortunately, in our recent history have been used as currency to exchange political favors.” .
Regarding public works, Caputo announced that “the National State is not going to tender any more new public works, and is going to cancel approved tenders whose development has not yet begun.” Also, the Minister specified that “the reality is that there is no money to pay for more public works that, as all Argentines know, often end up in the pockets of politicians or businessmen on duty.” “Infrastructure works in Argentina will be carried out by the private sector, since the State does not have money or financing to carry them out,” he added.
In addition, Caputo stated that subsidies for Energy and Transportation will be reduced, and clarified that “these subsidies are not free, but are paid with inflation.” The Minister stressed that “transport subsidies in the AMBA are an act of profound discrimination with the interior provinces; so we are also going to end this discrimination towards the interior.”
During the announcement, the Minister emphasized that the Empower Work plans will be maintained in accordance with what is established in the 2023 Budget. “We are going to double the Universal Child Allowance and we are going to increase the Food Card to 50%. “This is in line with what we said before, that we are going to strengthen the plans that go directly to the people, without intermediaries, and to the people who need it most,” he added.
Likewise, Caputo maintained that there will be an honesty of the official exchange rate, which “will be worth 800 pesos, so that the productive sectors really have the appropriate incentives to increase production.” “This will be accompanied by a provisional increase in the country’s tax on imports and withholdings on non-agricultural exports. In this way, we benefit exporters with a better price and equalize the tax burden for all sectors, stopping discriminating once morest the agricultural sector,” he added, while clarifying that “once the emergency is over, we are going to move forward in the elimination of all export duties, which we consider a perverse tax that hinders Argentine development.”
Finally, the Minister also announced that “the SIRA import system will be replaced by a statistical and information system that will not require the approval of licenses. This eliminates discretion and guarantees the transparency of the import approval process.” “Whoever wants to import, can now do so, period,” he concluded.
Source: Argentine News
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