Monday, May 20, 2024

ARGENTINA | 13-12-2023 16:22

Adorni: Transport and energy subsidies to be reduced from January 1

Spokesman of President Javier Milei’s Government moves to justify “urgent measures” announced by Caputo; He reveals plans to slash subsidies for energy and public transport will begin at turn of the year.

Presidential Spokesperson Manuel Adorni says that planned cuts to transport and public utility subsidies will kick in from the start of next year.

Speaking at his daily press conference on Wednesday, Adorni said that sweeping reductions trailed by Economy Minister Luis Caputo in a host of announcements the previous day would be delayed until the new year. 

Caputo had not provided any detail as to by how much or when the plan would begin in his pre-recorded video message and did not hold a press conference to explain the announcement.

Adorni, however, said Tuesday that the reduction in subsidies for public transport and utilities (electricity, gas and water) will be effective “from January 1” and suggested that the adjustment measures announced by Economy minister Luis Caputo “had immediate urgency."

As he specified, the set of economic regulations aim at “attacking part of public expenditure and improving fiscal revenue."

In the press conference provided daily from the Hall of Indigenous Peoples of the Casa Rosada, the presidential spokesman cited “inequality” in the cost scheme for public transport and utilities in the Buenos Aires Metropolitan Area, compared to what is paid in other parts of the country.

“This improvement in fiscal revenue by reducing subsidies still leaves a section to be solved in a tariff scheme we consider absolutely ridiculous,” he declared, adding: "The incentive will be on savings and the transfer of this subsidy scheme which will be centred on the demand and not the supply."

On the package of measures, Adorni said that they aim at creating credibility. “We need to rebuild what decades of the wrong policies made the world not believe in us,” he stated.

The official argued that the government had "no choice" but to take emergency measures.

He went on to say that President Javier Milei's government foresaw a 0.4-percent drop in the GDP in national pension programmes and that discretionary transfers to provinces would only shave 0.2 percent off spending.

We will eliminate the fiddling with and political business of social plans, which will improve revenue by 0.4 percent. This leads us to expect zero deficit and is what will anchor any expectation on more indebtedness and printing of money that is ruled out,” he continued.

“A dollar at 800 pesos includes a correction in incentives for exporters and a readjustment we weren’t used to,” he declared.

Regarding the removal of energy subsidies, he specified: “That will have the added detail that it will happen shortly. They will be subsidies to transport, electricity, water and gas. This improvement in fiscal revenue comes from the reduction of subsidies. This 0.7-percent improvement leaves a section to be solved”.

These changes in subsidies will take place starting on January 1, according to Adorni.

Regarding pensions, the spokesman said that “we intend not to give discretionary increases simply because we think of them, but to end with the scheme which has caused pensioners to have many needs.”

“The goal is to cut this perverse scheme, and thus one has to exert the powers to correct with some other method,” he added.

Adorni also warned that “Argentina is not some patient with a toothache, it’s in intensive care and on its death’s bed”, and pointed out: “They are measures that had immediate urgency."

“These measures are not what we dreamed of and we would have loved to live in different times. May I remind you that Milei has been President for 72 hours,” he added while promising a structural reform plan.

On the other hand, the spokesman underlined that the struggle against the fiscal deficit “is the mother of all battles."

“You can’t spend beyond your income and that’s not negotiable because it leads to a debt crisis or an inflation crisis we’ve been experiencing for over 20 years since we left the dollar-peso parity,” he insisted.

In another section of the conference, he stressed: “We needn’t be afraid of the truth but we have to act accordingly. We won’t lie."

Lastly, Adorni reiterated a concept repeated by President Milei about the Central Bank: “Our friend, the Central Bank, and its money-printing machine is no longer our friend and it won’t finance a single more peso of the treasury."



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