The national chain in which Javier Milei spoke for about 16 minutes, was focused on showing the success of having a first quarter of fiscal surplusa point that, in his opinion, is key to stopping inflation and entering a path of growth.
In reality, there are two ways to calculate the fiscal result of public accounts. There is the cash basis system and the accrual basis system.
The cash base includes the schemes corresponding to the National Administration, Trust Funds, Other Public Entities and Companies and the consolidated National Public Sector; while the second contemplates only the latter, that is, it excludes Trust Funds, Public Companies and the National Administration.
Put another way. The cash basis quantifies the movement of funds regardless of the fiscal year to which the allocation corresponds.
The accrual basis uses the recording criterion and reflects the allocation in the corresponding fiscal year regardless of the time in which the payment occurs. The accrual is purchased this month, but paid the following month. The cash is, I record as an expense what I pay this month.
The issue is that, if the cash basis is compared with the accrual basis, one finds that in March in the former there were fiscal surplus and in the second the fiscal deficit primary and financial.
Taking the cash basis criterion one finds a primary surplus of $625,034 million and the financial surplus was positive at $276,638 million.
On the other hand, if one does not take the accrual basis, one finds that in March there was a deficit of $73,145 million and in the financial area the fiscal deficit amounts to $367,955 million, data that can be seen in table 1.
Although the accumulated of the first quarter of the accrual basis gives surplusalready in March he gave deficit.
Another issue that continues to worry is the importance that the PAIS tax is having in total tax revenue, not including personal contributions and employer contributions. The PAIS tax was, of the post-co-participation treasury revenues, the second most important treasury tax during March, representing 17.7% of total tax revenues.
Clearly the fiscal adjustment has different components: 1) liquefaction of expenses such as pensions, salaries of public employees and some social plans, 2) some chainsaw with closure of departments, less personnel in the state and cutting of subsidies economic, 3) kick payments as is the case of CAMESSA and 4) greater fiscal pressure via the increase in the PAIS tax and the fuel tax that has been increasing every month.
The increase in public service rates cannot be considered an increase in costs for the private sector because these subsidies were previously paid by the private sector via inflation.
The fact to keep in mind is that behind the high rate there is an imposition of national and provincial taxes, municipal rates and trust funds that are attached to the fixed charge. As an example, in my house the electricity bill increased by 210% compared to the previous month, consuming 12% less kwh.
The fixed charge, which is what EDENOR charges to bring energy to my house, increased 289% from one month to the next and the cost of kwh was 182%, and an item appears that says Adjustments and Other Concepts that appears on the invoice, which then clarifies that they are Corrections on Previous Documents, that is, they charge a retroactive fee that no one knows where it comes from.
In other words, in the April ballot I paid a significant retroactive payment plus all the national, provincial and municipal taxes that are attached to the fixed charge and energy consumption.
The rate adjustment would be much lighter if they eliminated all or a large part of the municipal taxes and fees that are included in the bill.
Milei He had said that Cambiemos had made the adjustment wrong because what corresponded was to eliminate all those taxes. Well, he did not eliminate them, he left them and that generates greater fiscal pressure by increasing the tax base on which the percentages of taxes and fees for energy consumption are applied and this is also the case of gas.
The economy still shows no signs of recovery and that will surely influence tax revenues and it will be more difficult for the government to sustain the deficit zero due to the lowest collection.
The Argentine economy has been stagnant since 2011. For 12 years, activity has risen 2 points, the following year it drops two, then it rises 2% two years in a row, then it falls 2% two years in a row, but we are always at the same level. We did not manage to break the ceiling of a certain level of activity, which means that we do not enter stages of sustained growth to have more jobs, a lower unemployment rate and better real income.
The government is waiting for the omnibus law to come out with labor reform, tax increases, deregulations and other items. Possibly this time the law will succeed, the issue is that Argentina has a history of unpredictability in the rules of the game that will take time to generate the necessary trust for us to enter a stage of sustained economic growth.
To put it crudely, we are going to have to sweat blood to be credible and for capital to flow to Argentina.
In short, in the best of cases, a first step will be taken to get out of the long decline, but sustained growth will take the necessary time to show the world that we have become a rational country.
