The Chief of Staff, Nicolás Posse, will become the person who will manage the largest amount of money in the country almost. Private estimates indicate that in just a couple of months the budget credits They are going to run out and with this, it will be Posese who will be able to define per se What to spend on and how much.
According to data from the official website Open Budget, The extended 2023 budget law gives President Javier the possibility of spend up to $40.2 billion and 29% of them have already been executed. Meanwhile, on the side Of the estimated resources for this year, of $28 billion, it has already consumed 49%.
“At the end of May the budgeted money ‘runs out’; ergo, starting in June 2024, the Chief of Staff will be able to allocate all revenues on a discretionary basis and ‘pay’ what he wants and not pay ‘what he doesn’t want’”the consulting firm points out in a report Economy and Ethics.
The report indicates that the Chief of Staff “could discretionally allocate resources in June – December and pay what I wanted”, so he concludes that “Another very strong race is coming in Congress.”
Although it is true that the person who designs the National Budget is the Minister of Economy, who is responsible for its execution is the Chief of Staffin accordance with what the 1994 National Constitution says.
What emerges from the study carried out by the consulting firm run by the economist Diego Giacomini is that in a couple of months funds will begin to enter the State from the collection of taxes that are outside budgetary control.
Since President Milei decided to scrap the 2024 Budget that Sergio Massa had sent, who proposed reaching zero deficit by eliminating tax expenditure, thad to be extended by decree to 2023.
This project has a very serious problem of origin and that is that It was designed in 2022 assuming inflation of 60% for last year, when in reality it was 210%. Corrections had to be made to the games throughout the year.
Formally, the government should send a new Budget project for this year and submit it to the will of Congress, But since it does not have enough legislators to approve it, it is most likely that it will soon begin to update the extension through decrees, altering the items.
“The PEN will not send the 2024 Budget, because if it does, the main instrument of fiscal adjustment will fall.”: do not spend and allocate resources discretionally only to what you want,” states Economy and Ethics.
The report states, however, that the pillars of fiscal adjustment such as cutting pensions, social spending, subsidies and transfers to the provinces are not sustainable. In the same way that recession causes resources to fall.
“With this type of fiscal adjustment architecture, there is a high probability that it will end up being transitory and the primary surplus ends up disappearing later in time,” the text says.
In the case of the income generated by taxes, the Chief of Staff will begin to have resources that are not contemplated in the current Budget.
Something that was widely criticized during Cristina Fernández’s second term, when the opposition pointed out that inflation was underestimated so that there was a larger unforeseen collection, the destination of which became discretionary on the part of the Executive Branch.
An alternative to trimming
A report of the Argentine Institute of Fiscal Analysis (IARAF) returns to the budget proposal that Massa had designed, which provided for the elimination of tax expenditure, that is, exemptions to taxes and promotion programs that exempt beneficiaries from paying taxes
“The total estimate of tax expenditure included in the draft budget presented on September 15, 2023 for the year 2024 it is 2.08% of GDP,” says the report.
In that sense, it details that the exemptions represent almost 71% of total tax expenditure and that derived from economic promotion regimes explains the remaining 29%. In current pesos, the government is failing to receive almost $13 billion in taxes from people and sectors that benefit at the expense of greater fiscal pressure on the rest.
Source: Ambito
