The deputies of the ruling party and the dialoguing opposition who vote in the early hours of Friday in favor of the Ley Bases and, in particular, of article 5 will enable President Javier Milei to “modify, transform, unify, dissolve or liquidate public trust funds”. This is a policy that has already begun to be implemented by the Government with the definancing of funds such as Socio-Urban Integration (FISU) and Provincial Development. The governors complained about what happened with the last case, but they validated it by accompanying the vote of their deputies. With this tool, Milei will have the legal tool to advance the 28 existing trust funds under national jurisdiction.
The government policy that Article 5 will transform into law, with the approval of Congress, was announced by the Executive Branch last February, when first the spokesman Manuel Adorni and then President Milei said that the funds were only “political funds.” Among these “funds,” the Government could move forward with the elimination of funds such as those for Fire Management, Protection of Native Forests, promotion of renewable energies, science of knowledge and science and technology or other successful policies such as Procrear or the Progresar scholarships.
In the negotiation with the dialogue opposition and the governors, only one fund was protected. “It is excluded from the powers of this article the Trust Fund for Residential Gas Consumption Subsidiescreated by Law No. 25,565,” says the text of the majority opinion, which came with the modifications of the Senate.
During the debate in the Upper House, the Unión por la Patria bloc asked the reporting member of La Libertad Avanza to modify the article with the aim of removing the word “liquidate”, with the aim of, at least, leaving the legal tool active beyond the almost certain defunding. But it was rejected by the ruling party.
The opposition’s argument for finally approving the Ley Bases is that the Government “needs to have tools,” but this policy of eliminating trust funds has already proven to be arbitrary and deficient in its application by Milei’s administration.
The FISU operetta
The case of the Provincial Development Fund generated the claim of the governors as part of the adjustment that was applied to the provincial coffers. According to data from the Ministry of Finance of the Ministry of Economy of the Nation, they represent about 2 percent of the Gross Domestic Product (GDP) of the country. But a clear example was what happened with the FISU, regarding the elimination of a policy that worked correctly.
The FISU, was created during the government of Mauricio Macri and added financing with the Country Tax during the administration of Alberto Fernández, served to carry out 1,276 urbanization works in 5,060 popular neighborhoods. At the end of February, with Decree 193/2024, the Executive redirected the destination of the funds collected by the Country Tax and reduced contributions to the FISU to only 0.3 percent.
That decision was made based on a smear campaign and false news against the MTE, the UTEP and, in particular, against the figure of Juan Grabois. However, as PáginaI12 reported, the audit that President Javier Milei ordered to be carried out on the use of the FISU did not find signs of money embezzlement, payment of surcharges, or any indication of crimes committed. “If they want to say that there were crimes, they are going to have to invent them,” said Fernanda Miño, former head of the Secretariat of Socio-Urban Integration.
In the run-up to the debate in the Senate, the Network of Authorities of Science and Technology Institutes (RAICyT) also pointed out how the article puts this key sector at risk by indicating that the possible dissolution of the Fund for the Promotion and Encouragement of Innovation would leave the National Agency for the Promotion of Research, Technological Development and Innovation without funding.
In the same vein, before the first debate in the lower house, around 50 socio-environmental and human rights organisations – including CELS, FARN, Greenpeace and the Association of Environmental Lawyers – warned of the danger this posed to current regulations: “The dissolution of the Trust Fund for the Environmental Protection of Native Forests would imply the tacit repeal of articles 30 to 39 of the Law on minimum budgets for forest protection (Law 26.331).”
How do trust funds work and how does the Ley Bases propose to dismantle them?
Trust funds are resources that one entity, in this case the national State, grants to another – a province – for the latter to administer, and which are used as a guaranteed budget to ensure the financing and stability of a public program or policy. of State.
Precisely, in the case of public funds, it is the State that delegates the administration of funds to an entity (which is usually a public bank, generally Banco Nación or the Investment and Foreign Trade Bank -BICE-) so that manage them based on certain public policy.
According to article 5, which the dialogue opposition was willing to approve, in the event that the Government decides to liquidate and dissolve a public trust fund and discontinue the assigned program, it must proceed as follows:
- a) if the fund were financed by a specific allocation of a shared tax, the latter will be considered eliminated and the tax will be distributed again in accordance with the regime established by Law 23,548 and its complementary and modifying regulations;
- b) if the fund were financed by a specific allocation of a non-coparable tax, it will be considered eliminated and the tax will once again be allocated to the National Treasury; and
- (c) if the fund were financed by a specific allocation of mandatory contributions or surcharges created for that purpose, both the allocation and the mandatory contributions or surcharges shall be considered eliminated.
The 28 trust funds of national jurisdiction, in chronological order of creation
- 1990: Trust Fund for Scientific and Technological Promotion (Foncyt)
- 1995: Provincial Development Trust Fund
- 1997: Social Capital Trust Fund (Foncap)
- 1997: Federal Regional Infrastructure Trust Fund
- 1999: Federal Electric Transportation Trust Fund
- 2001: Transportation Infrastructure System Trust Fund
- 2001: Water Infrastructure Trust Fund
- 2001: Residential Gas Consumption Subsidy Trust Fund
- 2001: Trust Fund for the Recovery of Sheep Activity (FRAO)
- 2003: Mortgage Refinancing Trust Fund
- 2005: Homes with Carafe Program (Home)
- 2012: Argentine Bicentennial Credit Program Trust Fund for Single-Family Housing (Pro.Cre.Ar)
- 2013: National Fire Management Fund
- 2014: Universal Service Trust Fund for Digital Argentina
- 2014: Airport Security Infrastructure Trust Fund
- 2015: Trust Fund for the Development of Renewable Energy (Foder)
- 2016: Trust Fund for Social Housing
- 2016: Productive Development Trust Fund (Fondep, former Fondear)
- 2016: National Agroindustry Trust Fund (Fondagro)
- 2016: Universal Health Coverage Trust Fund
- 2016: Trust Fund for the Environmental Protection of Native Forests
- 2017: Trust Fund for the Development of Entrepreneurial Capital (Fondce)
- 2017: Trust Fund for the Distributed Generation of Renewable Energy (Fodis)
- 2017: Argentine Guarantee Fund (Fogar)
- 2017: PPP Safe Highways and Routes Trust
- 2019: Direct Assistance Trust Fund for Victims of Trafficking
- 2021: Domain Regularization Regime for Socio-Urban Integration
- 2021: Trust Fund for the Promotion of the Knowledge Economy.
