In less than two months, the ruling party lost strength in Congress. In recent weeks, agendas for the plenary sessions have not been finalized, which would make it difficult to approve other issues for the country’s governability, including the possible budget expansion announced by the Executive.
Julio Héctor Estrada, deputy of the Cabal bloc, Minister of Finance in the FCN–Nación government and current president of the Congressional Finance Commission gave his political and financial reading on a request of this type and the situation surrounding the legislature in the present.
If the budget expansion law initiative arrives for a maximum of Q13 billion, the legislative board chaired by Estrada will be in charge of knowing, evaluating and ruling on it. Different blocs, including allies, are unaware of the intentions to extend the ceiling for the current fiscal year.
The first version that was known is that 80 percent of the budget would be allocated to paying salaries, the rest for investment. The president of the legislative chamber of Finance spoke with Prensa Libre and presented recommendations so that an initiative of this type is as digestible as possible for the deputies, while he highlights that dialogue between all blocks will be key.
What reading do you have regarding this possible request for a budget expansion that the Executive will make?
My recommendation is that they try to address the most important thing, that they make it simple in financing mechanisms, few articles, few changes, to be able to have a more dynamic conversation that is very investment-oriented.
In statements, a vice minister of Finance said that the majority of the budget expansion would be for the payment of salaries and very little for investment. Is the correct formula the opposite?
Yes, I think people are wanting to see investment in hospitals, investment in schools, roads, ports, bridges, some solution for traffic. Obviously, social program topics can also be included. It is included, I understand, the issue of older adults and these issues.
Due to the budget that was not approved for 2024, the proposal must be simple, less is more, because, if what they present is a new budget, it will already lead to the discussion of a new budget.
How long might the discussion of a budget expansion take?
If what they present is something that simply adjusts some items and some institutions, with a very clear list and well agreed upon with the groups of which road to expand, why and with what control and transparency rules, the discussion is easier.
Much of the allocation grows organically. But if what they send is a 2024 budget, then obviously it is a conversation that cannot be done in a week. Let’s say, it will take weeks, if not months.
This is not the budget to try to achieve all the government goals, they are even financed, surveyed, and the capital execution of the projects in programs is very low.
So, my recommendation is that you make a proposal that is very easy to communicate and that the financing mechanism is also very simple, nothing sophisticated and no great new ideas, etc.
Deputy, when talking regarding an initiative, with few articles and simple. What does it translate to?
It is not the number of articles, it is whether we are going to change the allocation to all ministries, the allocations to different institutions of obligations in charge of the treasury will be changed.
So it is an article that changes the assignments of everything and you have to understand everything, you have to understand the annexes, you have to understand what everything consists of.
How necessary is it to be on good terms with other political parties to ask for a budget expansion?
They must even be careful with the issue, that it is Semilla’s government plan versus trying to integrate the priorities of other parties. Have that approach with the parties, to see what their priorities are, understanding that there are those who have some different priorities with a very social priority.
I think that, in the long run, support will be needed here for eventual approval. Let’s say that the Ministry of Public Finance normally approaches the different actors months before.
On average, how long would it take for an initiative that meets the recommendations you have indicated to obtain a favorable opinion?
That is difficult to say, it depends a lot on the clarity of the initiative and also on the environment in which the plenary session of Congress finds itself, which is becoming a little more tense, let’s say.
A budget modification that we made in 2016, starting the government, took us regarding two months and even though it was a proposal that was not very complex, it was much simpler. This is more complex, which is why the Executive’s articulation and lobbying work is required.
This is done through its deputies and the Executive itself, speaking with the different blocks and with the different factions of the blocks. It is very important.
Are the changes that must be made in a budget expansion request complex?
It is cut, added and everything, but it cannot change an entire geographical list of works. That has to come with the Executive’s proposal and with an important level of consensus with the different benches.
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