Wednesday, July 24, 2024

ARGENTINA | 12-06-2024 12:15

Senate begins debate on Milei’s ‘Ley de Bases’ mega-reform bill

Senators open debate on President Javier Milei's flagship 'Ley de Bases' reform bill as demonstrations begin outside Congress.

All eyes turned on Congress on Wednesday morning as senators began debating President Javier Milei’s sweeping ‘Ley de Bases’ bill.

The government, which this week marked six months in office without the passage of a single piece of legislation, faced demonstrations by unions and left-wing groups against the reform package outside the National Congress building as the upper house opened debate.

"The effort made by Argentines in these months is enormous, we hope [with this bill] to lay the foundations for progress," said ruling party senator Bartolomé Abdala (La Libertad Avanza-San Luis Province) in his opening speech.

If the nation’s senators approve the so-called ‘omnibus’ bill, which received the green light from the Chamber of Deputies in April, the text of the proposed legislation – which contains more than 200 articles and will be subjected to amendments – will return to the lower house for final approval.

The Legislative Assembly has been a far from happy hunting ground for Milei's La Libertad Avanza party, which is firmly in the minority in both chambers.

Milei’s ‘Ley de Bases’ bill is a much-reduced version of an original bill that contained more than 600 articles. That was withdrawn by the government back in February after it was heavily amended by the lower house. 

Argentina’s President responded angrily to that setback, describing Congress as a “rat’s nest,” and slamming its legislators and the nation’s provincial governors.

In the Senate, La Libertad Avanza holds just seven of the 72 seats. It needs 37 votes for the bill to be approved and currently has around 35 secured, thanks to the support of centre-right and right-wing senators. 

If the bill is rejected, Milei will have to wait at least a year to push it through again. Such an outcome would further weaken the President.

"For six months they have been discussing the 'Bases' law, which would have made the adjustment less painful, but politics doesn't care about that," Milei said on Wednesday at a forum in Buenos Aires.

He is due to depart Argentina shortly for a tour of Europe, during which he will attend the G7 Leaders Summit in Italy as a special invitee.

In recent weeks, Milei’s government has come under pressure due to developments at the Human Capital Ministry, which brings together four portfolios plus the ANSES social security administration.

Human Capital Minister Sandra Pettovello is under fire after the discovery of 5,000 tonnes of food that was being held in storage. The government refused to send food to soup kitchens and community kitchens, but backtracked after it emerged that some foodstocks were perishable.

This scandal occurs with Argentina in the grip of nearly 300 percent annualised inflation. Around half the population lives in poverty, consumption is falling and there has been a sharp drop in industrial activity.

Some experts say the President needs a political victory to offset the impact of the draconian fiscal austerity measures he has implemented since taking office last December.

"From the IMF [International Monetary Fund] to foreign investors, many actors say that, for Milei's proposal to be credible, laws from Congress are needed, agreements are needed, a more or less functioning state is needed," said Iván Schuliaquer, a political scientist at the University of San Martín in Buenos Aires Province.

The ‘Ley de Bases’ bill delegates extraordinary powers to the executive, includes a controversial incentive scheme for large investments and sets up around a dozen public companies for privatisation.

During the initial hours of debate on Wednesday, ruling party lawmakers indicated they would be willing to remove state airline Aerolíneas Argentinas, the Correo Argentino post office and Radio y Televisión Argentina from the list of state firms to be sold off in order to secure the bill’s passage.

Economy Minister Luis Caputo said on Tuesday that the law is "an accelerator, an enhancer of the recovery of the economic situation.”

The Senate will also debate a tax reform bill in parallel, which includes the reinstating of income tax on salaries and pensions.

Teachers and state employees have called a strike against the reform bill, while social organisations, political parties, trade unions, retirees and members of civil society have called for ongoing protests near Congress during the debate.

Both the ‘Ley de Bases’ bill and its accompanying fiscal package will be debated separately, with senators set to vote on them chapter-by-chapter. 

The vote on the main bill is expected to take place late Wednesday night or in the early hours of Thursday morning.



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