“I started to think about the government measures for what will be in 2025… Faced with the landscape, I confirm that I will continue with the chainsaw fully… LONG LIVE FUCKING FREEDOM!!!”, the president published last Tuesday on social networks. Javier Milei.
The policy of zero deficit (or rather surplus) will continue to be the fundamental pillar of government management. For this reason, Milei is not willing to give in to increasing allocations, as some provincial leaders demand. The reduction of personnel in state departments will also continue. On the one hand, expiring contracts will not be renewed, and staff of retirement age will retire. Another mechanism to reduce personnel will occur through the elimination of areas whose functions are no longer required.
“The purpose is to eliminate all superfluous expenses generated by the State,” summarizes an important collaborator of the Casa Rosada.
But not everything will be a “chainsaw”, the La Libertad Avanza government seeks to radically transform Argentina based on its ideology.
In this sense, as far as he was able to know Scope exclusively, at the direction of the first president, The technical teams are working on “deep reforms” that cover the tax, pension, labor and criminal areas, among others.
Tax reform
In tax matters, The Executive Branch aspires to reduce the amount of taxes to five or six. The intention is to have the project advanced so that the head of state can present it to Congress in the speech at the opening of ordinary sessions 2025, on March 1, as announced in the Casa Rosada.
The initial objective is to simplify the tax system. The ruling party warns that a significant initial reduction in the tax burden is ruled out, since the priority is to maintain balance in the Treasury accounts.
Currently there are 155 different types of taxes throughout the country, according to a study by the Argentine Institute of Fiscal Analysis (IARAF). However, there is a high concentration of income since 6 taxes represent 83% of Argentina’s consolidated tax collection (VAT, Social Security Contributions and Contributions, Profits, Personal Income, Bank Debts and Credits and Export Duties). ).
The national government also considers that each province must define its tax policy. In fact, different governments have been increasing taxes, but the Milei administration understands that the market will be responsible for punishing this decision by moving activities to those places that charge less taxes.
Retirements
Another of the important reforms that the Government is developing, also for next year, consists of change the pension regime contemplating, among other aspects, the elimination of special regimes.
The official assessment is that, if all privilege regimes were abolished, the minimum retirement could be tripled. If this elimination of the privilege regimes were applied, the minimum retirement, which today stands at $259,600, would go to 778,800.
Different workers such as those in construction, teachers, researchers, the Judiciary and the Foreign Service, among others, have special regimes that allow them to retire with age requirements and years of service with lower contributions.
According to the latest data from ANSES (June 2024), Some 250,000 benefits corresponding to special regimes are paidout of a total of just over 7 million.
That is, they represent 3.4% of the total contributory benefits, but they imply 10.9% of the expenditures of the total contributory benefits since they have salaries considerably higher than the average of the general regime. In the middle of this year, the average credit of the special regimes was $1,037,000 against $298,000 of the general regime.
The intention of the national authorities is to continue with the pay-as-you-go system, but at the same time encourage the development of private retirement insurance.
Of course, for the system to be sustainable over time, the number of blank workers needs to increase. It is estimated that currently the proportion of contributors is only 1.5 for each retiree, far below the 3 workers per liability that are needed to ensure the sustainability of the system in the long term. For this reason, The pension reform will be presented together with a labor reform. The intention is that this initiative contemplates the adoption of measures aimed at encouraging labor formalization. It is worth remembering that informal work is estimated to represent almost 30% of the workforce.
Behind closed doors, in the ruling party it is said that The national government had to moderate its aspirations for reforms in union matters so as not to accentuate the confrontation with the unions.
Thus, initiatives such as those referring to the optional nature of contributions or the democratization of unions fell by the wayside. But it is estimated that after what they hope will be a resounding victory in the mid-term elections, they will be able to have sufficient political strength to deepen reforms in this field.
Along with the mandate to recover the economy, security is a central issue for the administration. For this reason, changes in laws are being studied aimed at toughening penalties for crimes, particularly considering cases of recidivism.
The Government considers that in addition to filling vacancies in the courts, oral trials will be key to speeding up justice times.
Source: Ambito
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