Javier Milei’s government is eagerly searching for support for a trimmed-down version of the President’s ‘Omnibus’ bill ahead of what looks to be a key month for the libertarian leader’s sweeping reform plans.
After multiple meetings and lengthy negotiations with lawmakers from the PRO and Hacemos Coalición Federal caucuses, in order to secure the strongest amount of support in Congress, the government this week began circulating a new version of its flagship reform package.
With fewer chapters and articles, the Milei administration wants to secure its passage in order to move forward with substantive reforms prior to May.
Congressional sources say the bill could be put to debate next week in the lower house, yet it it unsure of how much support it will win.
Highlighting the stakes and the opposition to the President’s economic measures, Argentina’s largest labour federation, the CGT umbrella union group, said Thursday it would call a strike for next month.
CGT leaders said the action – the second general strike of the Milei government – would take place on May 9. They also confirmed they would mobilise on May 1, International Workers' Day.
Social and labour unrest is growing in Argentina. Hundreds of bus lines were stalled on Thursday as the UTA union leaders went on strike. Though talks ended in the lifting of the measure, labour leaders confirmed they would call another walkout for April 25.
Earlier this week, social organisations and picket groups called for emergency food aid in a large demonstration in central Buenos Aires, during which they clashed with police.
Omnibus bill
La Libertad Avanza, firmly in the minority in Congress, began preparing the ground midweek when its lawmakers ousted the head of its caucus in the lower house amid internal disputes.
Governors and deputies of the so-called blocs that are open to dialogue have already received a final version of the ‘Omnibus Law,’ as well as an accompanying fiscal bill.
The new draft of the flagship reform has 279 articles, plus annexes listing the companies subject to the privatisation plan. It is a much more technical text than the first one, which the government hopes will smoothe its passage through Congress.
The articles deal mostly with chapters on economic deregulation, the new Competition Defence Court and the Markets and Competition Agency. In terms of pensions, the last moratorium is eliminated for those who owed any contributions.
In the first article, the bill declares “a public administrative, economic, financial and energy crisis for one (1) year.” This point is one of the main changes from the original version of the bill, as the length of the period has been reduced and there are no possible extension.
This second version also empowers the Executive Branch “to modify, transform, unify, dissolve, liquidate or cancel public trust funds, in the cases where this is not possible according to the procedures established in the statutes that created them.”
Labour reform
The labour reform in the law is less ambitious than the previous one, including matters linked with money-laundering and a moratorium for companies regularising the employment situation of their workers. It also promotes debt pardon and the termination of the Register of Employers with Labour Sanctions.
In order to continue with cutbacks, the bill empowers the Executive Branch “to move forward with the privatisation” of state companies, and also talks of the reduction of state employees.
“Any staff falling under the stability regime which is affected by restructuring measures including the elimination of bodies or their functions, will be automatically in an ‘on call’ status for up to twelve (12) months,” the text reads.
Another point of the law deals with the Sustainability Guaranteed Fund of the Comprehensive Argentine Pension System and allows for its being invested “according to adequate security and profitability criteria, in observance of the guidelines set by this law and its regulatory statutes, as established in Article 8 of Law No. 26,425”.
In addition, another important section comprises the amendments of the Hydrocarbons and gas-related matters law, such as the authorisation of “imports of natural gas without the need for prior approval”.
Fiscal reforms
The fiscal reform package, which the government eventually decided to remove from the original Omnibus Law, is now a separate bill called the “Palliative and Relevant Fiscal Measures Law.”
The most relevant point of this bill is the reinstatement of the fourth bracket of ‘Ganancias,’ or Income Tax. If this law is passed, the non-taxable minimum will be 1,800,000 pesos for single people, while for married people with children it will be 2,200,000 pesos.
Chapter II of the State Reform on the “privatisation of state companies” of the draft spread by the Government of the new Omnibus Law is nearly four pages long and has eight articles.
The initiative expands the number of companies subject to privatisation from 12 to 18 and, like in the previous version, it groups state firms into three categories based on their purpose.
Firstly, there are the four “companies wholly owned or with a majority ownership by the State”, which may be privatised in their entirety, if so established. They are Aerolíneas Argentinas SA, Energía Argentina SA, Radio y Televisión Argentina SE and Intercargo SAU.
The latter, providing services to the main airlines in the country, is the one that was added to the list and which was not in the previous version.
The second group has to do with five companies wholly owned or with a majority ownership by the State which, according to the proposal, would be transferred to private concessions. They include Agua y Saneamientos Argentinos S.A. (Aysa), Correo Oficial de la República Argentina S.A., Belgrano Cargas y Logística S.A., Sociedad Operadora Ferroviaria S.E. (SOFSE) and Corredores Viales S.A.
Lastly, there is a list of nine state companies which “may only be privatised partly as the State must retain its majority stake in the capital or in its corporate decision-making”. They are Nucleoeléctrica Argentina S.A., Banco de la Nación Argentina, Nación Seguros S.A., Nación Reaseguros S.A., Nación Seguros de Retiro S.A., Nación Servicios S.A., Nación Bursátil S.A., Pellegrini S.A, and Yacimientos Carboníferos Río Turbio (YCRT).
– TIMES/PERFIL
Comments