Quintela, Kicillof, Zamora, Insfrán, Ziliotto and Melella were at the forefront of the rejection of both initiatives but govern the provinces that will receive the most resources after their implementation…
08:45 | Saturday June 29, 2024 | La Rioja, Argentina | Fenix Multiplatform
…The impact of the RIGI and the labour reform that the CGT tolerated as a lesser evil. A report that exposes the situation in numbers and the revealing survey by Federico Aurelio
The approval of the Bases Law and the fiscal package, after six months and a costly learning curve for the ruling party, contains a paradox that is only now being analyzed by the Government and the dialogue opposition, which was in charge of negotiating so that the Early this Thursday morning the president has at his disposal the tools to execute his government plan. Those who most opposed its approval will at the same time be those who will reap the greatest benefits, some in the short term, others in the medium term and the rest in the long term.
On that list you can register the governors Axel Kicillof (Buenos Aires), Gerardo Zamora (Santiago del Estero), Sergio Ziliotto (La Pampa), Ricardo Quintela (La Rioja), Gildo Insfrán (Formosa) and Claudio Melella (Tierra del Fuego), whose senators and deputies voted massively against both initiatives but valuable resources were guaranteed to face a year of shortages. Also, the CGT, which despite the public beatings of the hard wing embodied by Pablo Moyano and the unions with higher salaries, found itself with a “friendly” labor reform, which did not touch the unions’ coffers, nor made further progress on social works, and can serve as a lever to create new formal jobs, therefore, more contributions.
The tight vote in the Senate – which forced Vice President Victoria Villarruel to break a tie in extremis – and the approval with a handful of votes more than the minimum in the House of Representatives to restore the Income Tax and the changes in Personal Property showed that Milei’s Government had to make concessions to its original proposals, due to the granite unity that Kirchnerism demonstrated in both Chambers. Union for the Fatherland made use of its 33 senators and 100 deputies and despite the “defeat” that represented the approval of the Ley Bases and the fiscal package, the same governors and unionists will be able to receive the “benefits” of both initiatives, without having lowered their flags.
This was one of the topics discussed at the meeting held at the Casa Rosada by a delegation of radical and PRO deputies, led by the president of the UCR bloc, Rodrigo De Loredo, who went to alert the Chief of Staff, Guillermo Francos. , that Kicillof is going to get more funds derived from the sharing of Profit, without being obliged to transfer part of those resources to opposition municipalities. “We put the cost and the votes and he takes the benefit alone,” they said after that meeting.
Why this warning? A report prepared by Nadin Argañaraz, who presides over the Argentine Institute of Fiscal Analysis (IARAF), which Infobae had access to, can serve to explain with numbers what this paradox is about, which generated the approval of the Ley Bases and the fiscal package, which mainly benefits those who were most opposed. It is a research work that puts numbers to it, while the pollster Federico Aurelio, from the consulting firm Aresco, proposed a qualitative look at the political relationship between the Nation and the Provinces, which complements the cold econometric data.
As a net result, the change in Profits implies a greater effective tax pressure for the economy, estimated at 0.5% of annual GDP. Indeed, in current currency, the increase is of the order of $3,100,000 million (…) Given that the Income Tax is a co-participatory tax, approximately 60% of the collected goes to the provinces and CABA, and the remaining 40% goes to the Nation. In effect, of the 0.5% of the GDP with the highest potential collection, 0.30% will go to the Provinces and CABA and 0.2% will go to the Nation,” described the president of the IARAF.
According to the report, for the Nation, “this possible 0.2% of GDP in additional annual revenue is equivalent to 5% of the total fiscal effort required to eliminate an annual fiscal deficit of around 4.4% of GDP. In December, the forecast of positive impact on revenue for this reason was double, that is, 0.4% of GDP.”
“It is clear that the result of the reform is different by province, with the amount per inhabitant being the most appropriate for measuring the impact. If the extremes are taken, the inhabitants of Tierra del Fuego, Catamarca and Formosa would be the most benefited by the distribution of the collection, since they would receive an additional $115,000, $110,000 and $103,000 annually, respectively. On the other hand, the inhabitants who would receive the least would be those of CABA, Buenos Aires and Mendoza, with $13,600, $21,600 and $35,000, respectively,” the work highlighted.
And he added that, on average, the additional transfer would be $67,500 per inhabitant. “The provinces of Santiago del Estero and San Juan would have an extra income from co-participation of $67,000 and $71,000, respectively,” described Argañaraz’s work. “In the case of provinces such as Catamarca and Formosa, the Revenue reform is clearly favorable. If the case of Catamarca is taken, the provincial government will receive an annual amount per inhabitant of $110,000, a figure that results from the combination of an extra income of $47.5 billion and a population of 429,500 inhabitants. This amount of money is much greater than the contribution that the people of Catamarca who will have to pay a higher income tax from the reform will make,” he concluded.
The work suggests that despite having cast more than 30 votes against, the province of Buenos Aires governed by Kicillof will receive an extra collection estimated at 378 billion pesos; Santiago del Estero (Zamora), whose eight deputies voted against, will receive 71 thousand; Formosa (Insfrán), with three votes against, will have $62 billion; La Rioja (Quintela), with four votes against, 35 billion pesos; La Pampa (Ziliotto), which put two votes against, 33 billion; and Tierra del Fuego (Melella), which three voted against, $21 billion.
The 10 governors of Together for Change Maximiliano Pullaro (Santa Fe), Jorge Macri (CABA), Rogelio Frigerio (Entre Ríos), Alfredo Cornejo (Mendoza), Gustavo Valdés (Corrientes), Ignacio “Nacho” Torres (Chubut), Carlos Sadir (Jujuy), Leandro Zdero (Chaco), Marcelo Orrego (San Juan), and Claudio Poggi (San Luis) issued a statement that seemed to echo that paradox.
“We have worked hard together with our blocks to approve the Bases Law that the Government requested from the National Congress. We believe that it is a useful instrument so that you can comply with the change that the majority of Argentines voted for. As the National Government itself said, they now have the tools to begin a new stage that must be one of growth, investment and employment. There are millions of Argentines who accompany, with extreme effort, and they need these changes to begin to be noticed in their daily lives and their economic well-being. That is the great challenge of the National Government from now on,” he indicated.
The rest of the governors had an attitude of collaboration and open negotiation with the Casa Rosada. There were agreements that allowed them to bring key votes closer to Martín Llaryora (Córdoba), Gustavo Sáenz (Salta), Hugo Passalacqua (Misiones), Rolo Figueroa (Neuquén), Alberto Weretilneck (Río Negro), Claudio Vidal (Santa Cruz). And with the two Peronists who broke away from Kirchnerism: Osvaldo Jaldo (Tucumán) and Raúl Jalil (Catamarca). They contributed their own votes, removed legislators from their seats to facilitate approval or “contributed” key abstentions.
Nation-provinces and the surveys
The conduct of the governors, both those who fought to prevent the approval of Bases and the fiscal package – even knowing that they would be able to reap the benefits of its approval – and those who pushed for its approval responds to a political panorama that provincial leaders record on a daily basis. Political analyst and pollster Federico Aurelio revealed that in the polls he conducts in the interior “the majority will of the people is for the governor to be independent from the national government, but not to be an opponent.”
“They don’t want them to be allies, but much less want them to be opponents. The prevailing opinion is that the governor has independence, but that he maintains a good relationship with the national government. Secondly, that he be an ally and, lastly, that he be an opponent,” explained the head of Aresco, who has just concluded a survey that gave Javier Milei a support of around 56%, at the same level as what was obtained in the second round and at the beginning of his administration.
The study also analyzed public opinion regarding the Ley Bases. “When I ask about some specific issues of the Ley Bases, there is more disagreement than agreement. People say ‘I want to support the national government’, but there is more disagreement about the increase in the Income Tax, extraordinary powers, privatizing public companies, labor reform,” explained Federico Aurelio.
This social rejection may give rise to the position expressed by the six governors, who hope that when the content of the measures begins to be implemented, they will be on the side of those who opposed their approval, regardless of whether they are dependent on the benefits that, in terms of fiscal resources, they may have.
“What are the people of Buenos Aires going to think that Axel Kicillof is against the Income Tax and then is the main beneficiary? They will consider that they disagree more, it will not depend on Kicillof. Likewise, in the cultural battle that Milei raises there is a new situation: a year ago it was unthinkable that privatizing public companies would have 40% agreement, or giving extraordinary powers to a president, a labor reform or restoring a tax such as Profits. This means ‘Milei represents this, I support Milei and therefore I have to think like him’. Everyone is not convinced, 55% who voted for him are not convinced, but 44% of the total are convinced. This is new,” explained Federico Aurelio.
This is the basis that gives Milei the strength to argue with political strength and match a board where he plays without his own governors and with minority representation in both Chambers of the National Congress. And with what he achieved, almost seven months after taking office, his first parliamentary victory.
Source: INFOBAE
