Reasons for Espacio Público’s call to Congress and Lamonida to postpone pension and tax reform
In June, it will be a year since a group of 16 economists proposed a series of aid to tackle the pandemic, which later became a comprehensive agreement on creating a 12 billion fund for 24 months.
From that date until now, technicians have been practically absent from discussions about new measures to address the health, social and economic crisis unleashed by the Covid virus. Their early warnings were not heard of the first withdrawal of 10% of the pension funds, and then they withdrew, leaving the field open to politicians and civil society.
But the study center Public space He sent an open letter to politicians of all colors entitled: “Call for emergency care without opportunism.” In it, they call for the postponement of the pension reform project, the debate about tax reform, and the rejection of ideas such as differentiation of the value-added tax.
This call only occurs when a common minimum agreement is negotiated between the government and Congress, as the door has been opened to civil society, but not many technicians have been invited to make their contributions to this agenda that includes: More social assistance for individuals, SMEs, and the financing formula. .
Why was it necessary to send this alert? Responds to public space CEO, Diego Pardo. We are trying to defend how we think public policies should be implemented. The bridges are there and we are ready, but they really are travel a lot. We understand that we are in a long campaign, and that they, the parliamentary leaderships, are concerned with giving electoral signals instead of having well-prepared public policies, and the call is to rethink this path. “
This statement is signed by the managers Think tank Among them are people who have been heard widely before and who even They were part of the current constituent unit governments, such as Eduardo Engel, and Andrea Repetto, former Finance Minister Rodrigo Valdes; Ex-President of the Central Bank, José de Gregorio; Andrea Butelman, Luis Cordero and Eduardo Petran, Among other things.
The statement begins by referring to a polarized environment with an “exhausted government” on the eve of the elections. They pointed out, “It is clear that we are in the middle of a storm, so it makes sense to pick candles and worry about emergencies,” noting that the urgent need today is the most comprehensive social assistance possible so that people remain in quarantine and reduce infections. “The first thing is to separate discussions on social assistance resulting from the pandemic from those aimed at structural reforms,” they note.
What do they suggest? “We need a transversal commitment to avoid new withdrawals … (and) we recommend postponing pension reform until the new government. They assert that the bill does not contain a minimal coherent design and is not shared.”
It also ensures that the “financial situation” of the country is sufficient to fund emergency measures, and therefore it is not necessary to initiate a tax conversation.
There is a pending tax agenda that is easy to implement: eliminate exemptions and strengthen measures to control tax evasion. The different taxes with which we decide to finance financial spending must operate in an integrated and coordinated manner: it is better to postpone the legislative debate to the new government.We are now starting a social and technical dialogue, “they assert.
They also rule out insistence on temporary measures such as differentiating the value-added tax, as this would increase evasion.
Pardo comments that several months ago, this research center had been thinking about the importance of the various projects that had appeared on the public arena, but the red light appeared when they realized the tortuous progress the pension project had made because the government insisted on his idea that the additional 6% contribution goes in equal proportions. For individual accounts and for the collective order, while the opposition states that 6% should be collective.
This project started poorly because there was no citizen participation or advisory board. What we have today is a fix that has no clue behind, no clear horizon, and is undergoing adaptations to see if they’re going to pull something out, but they’re patches of inconsistent with each other. I understand that lawmakers and senators are going through a long election process, trying to speed up change, but pensions are a bad issue for her, says Espacio Público’s CEO.
He explains that changes to Social Security require broad stability given the amount of resources involved, “If things are done wrong, it will take decades to roll back.”
Another issue is Kings Because even though the announcement confirms that it does not advance temporary tax measures, Bardo states that they must be addressed, but within the institutional framework and not bypassed. This is because the bill passed by the House of Representatives yesterday talks about ownership, thus avoiding the exclusive presidential initiative on taxation, and ignoring the constitutional quorum.
“There is fairly broad agreement that the specific mining tax does not collect enough, especially given the copper super cycle. We must establish another tool, we must give this debate. We are trying to give an electoral signal, but it is not right to make decisions of this size so easily, “he concludes.