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ARGENTINA | 17-10-2023 14:42

Argentina's government gives citizens option to renounce public transport subsidies

With a knowing nod to libertarian critics of government, Argentina's Transport Minister Diego Giuliano announces that citizens may now renounce their right to transport subsidies: “Those who agree with a policy of no subsidies may waive it.”

With a knowing nod to its libertarian critics and their outrage against over-reaching state aid, Argentina's government has announced it offer citizens the chance to renounce their right to public transport subsidies offered through the SUBE card.

Transport Minister Diego Giuliano announced in a press conference that citizens may now opt out of the system, if their so choose.

“Those who agree with a policy of no subsidies may waive it," said the official.

Giuliano said that the five million people who use a SUBE card to travel on buses and trains in the Buenos Aires metropolitan area and 53 other cities nationwide can de-register themselves from the system starting Friday, October 20, via the government's website at argentina.gob.ar/SUBE.

For those waiving the subsidy, train tickets will cost on average 1,100 pesos and bus tickets 700 pesos, the Transport Ministry confirmed. The new rate will kick in on Friday, October 27, for those who apply to waive their subsidy.

Bus-drivers can also request to pay the full fare, it added.

According to private studies, the state pays 85 percent of the real cost of each fare. The Congressional Budget Office (OPC) estimates that all national subsidies cost 2.6 percentage points of GDP in 2022, 13 percent less than the previous year. 

When asked whether not waiving the subsidy would alter access to the monthly purchase of savings dollars for citizens, as was the case with opting out of energy subsidies, Giuliano explained that the two measures have nothing to do with each other.

“There is no link between the purchase of dollars and waiving the subsidy right now. It’s a wholly optional system. The universal subsidy is not modified, what changes is the capacity to choose not to have a subsidy,” Giuliano clarified.

When asked about the economic impact of the measure, sources from Transport Ministry admitted that they do not actually expect a great economic impact, but said the move was to clarify the actual cost of the ticket and the subsidy to make the State aid clear.

Citizens on the streets of Buenos Aires were generally in agreement with the move.  "If there are people who think the state should stay out of their lives, then let them return the subsidies they receive," 50-year-old Jorge Romero said as he waited at a bus stop close to the Plaza de Mayo.

The policy is an acknowledgement of criticism from libertarian presidential frontrunner Javier Milei, who has vowed to slash government spending, and an attempt to encourage critics to put their money where their mouth is.

"Those voting for Milei should give up the subsidy, because if you’re voting for an elimination of subsidies and keep it, it’s contradictory,” the official said in a radio interview on Tuesday. “If, on the other hand, you’re thinking of voting for [ruling coalition candidate Sergio] Massa, who suggests the State should behave and accompany people this way, of course you should keep the entire subsidy.”

"Anyone who votes for Milei should get off the subsidy," he added.

Key elements of the policy

– When a user waives the subsidy, the decision applies to all the benefits in the SUBE network.

– The social 55-percent discounted fare currently covering 4.9 million people nationwide would not apply.

– Users would be waiving all the discounts in the Buenos Aires Metropolitan Area while changing between different means of transport.

– Local discounts defined in the jurisdictions where the fare is paid with SUBE would also be lost. Thus, for a Buenos Aires user who has to take three buses or two buses and a train to go to work in the City every day, fares could go from 300 pesos to over 2,100 pesos per journey, after losing all benefits and paying for the full tickets.

– The Transport Ministry has confirmed that, irrespective of this choice, public transport fares determined by the Government will remain frozen until December 10, and that if the ruling party continues in power, the subsidy system would change to users having the option via the SUBE card.

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