Citing the extension of the 2021 Budget, the work states that Economic Services are the second largest component of spending (18.62%) and 2 billion pesos will be allocated. The “Energy, Fuels and Mining” function represents 57.33% of the total economic services with a total of $1.15 billion.
In this regard, CEPEC noted that “transfers to maintain energy subsidies are higher than what is allocated to education policies, policies against hunger, even higher than employment or housing programs” and that “most of the subsidies are concentrated in terms of absolute in the highest income deciles”.
“This is because, although technically the subsidies are given in a flat way, that is, almost ‘for everyone the same’, it benefits those who use the most electricity and gas,” he adds, while stressing that “energy policy cannot allow the poor to subsidize the rich.
On this point, the analysis says that “discussing whether electricity and gas should increase, when inflation exceeded 50%, is like discussing squaring the circle, the essential thing is that this occurs in a harmonious and balanced way”, and proclaims that “progressiveness should be an irreplaceable goal, while fiscal policy is strengthened”.
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Lastly, CEPEC proposes a solution similar to the one followed to implement modifications to the Income Tax.
“If the intention is to increase Disposable Income, there are direct transfers that are infinitely more effective (and that today have less budgetary credit), because it is socially unfair that the highest segment of our society obtain greater benefits and because they are the most vulnerable segments who ultimately need more robust social policies,” the text concludes.
Source: Ambito
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