The Chamber of Deputies approved the 2017 budget yesterday with over two-thirds majority. The first budget of President Mauricio Macri’s government received 177 votes in favour, 58 against, and 4 abstentions. It has now been passed on to the Senate.
Speaking of the significant support for the budget, Mario Negri, spokesperson for the governing coalition Cambiemos, gave a summary at the end of the debate: “Maybe this budget doesn’t please everyone. But it’s a turning point that makes us proud. It is the budget that we built together with the country that we inherited. It doesn’t commit to spending more than we can raise. If we correct some things, we are on the right track.”
Next year’s funding sees 64% of funds going to social services, 14.4% to economic services, 10.5% to resolving public debt, 5.8% to government administration, and 5.3% for defence and security services. One of the key points of the budget is the estimation for the future, as it predicts that there will be 3.5% growth in GDP and the deficit will be around 4.2%. It also forecasts an average exchange rate of around $18 to US$1, and an inflation rate of 17% for 2017.
One increase in allocation from the budget was for universities, rising to $76bn. This was a controversial area as the extra $1bn went to only 22 national universities, excluded the other 28. This prompted a public criticism from the president of the Education Commission, José Riccardo, who referred to a ‘list of happiness’ for universities with connections to the opposition. Despite the controversy and although this vote was slightly less popular, it still held a significant majority, with 138 votes in favour, 67 against and 22 abstentions.
One of the chief reasons for the overwhelming approval the budget is due to the amount of money being distributed to the provinces. An example of this is that $5bn is allocated to the Federal Solidarity Fund, which will then be distributed among the provinces for infrastructure, with a further $4.5bn going to the Ministry of the Interior, Public Works and Housing.
Another popular point of discussion was the total amount of funds allocated to the Belgrano Plan, an organisation created in December 2015 as a plan for development in ten provinces in northern Argentina. In the budget it is referred to as “the most ambitious plan for social and productive gain and development of infrastructure in the history of Argentina” and has the aim of improving transport links and the supply of drinking water and electricity to homes.
Although Economy Minister Alfonso Prat-Gay had promised that $85bn would be allocated for the Belgrano plan, the government finally came to the agreement that it would be $41bn. “We didn’t want it to be a promise that wasn’t fulfilled because the north is the region with the greatest inequality, and for the Peronists a budget only makes sense if it manages to decrease poverty,” said Pablo Kosiner, from the Justicialist party.
Other allocations from the budget to provinces in the north included $3.5bn in cancellation of debts made available to 28 companies in La Rioja, and an agreement from the Executive Branch to return 15% of federal tax revenues to the local governments in Santa Fe, San Luis, and Córdoba, as mandated by the Supreme Court in 2015.
In a separate vote, the members of the Chamber of Deputies also approved the limitation of ‘superpoderes’, which constitutes the reform of the Financial Administration Act to limit the powers of budget reallocation in the hands of the Cabinet. They can now only reach a maximum level of reallocation of 7.5% of the budget next year and this percentage will then be reduced to 5% from 2018 onwards. Unsurprisingly this vote was hugely popular, with 230 in favour and only 6 against.
Overall, there were still many who remained in opposition to this budget. Kirchnerist Héctor Recalde stated that he voted against it due to the cuts in the significant issues of human rights and science and technology. “We are voting against it, to defend national sovereignty, economic independence and social justice, and to defend the interests of the people.”
In contrast, during the debate the Peronist political alliance Frente Renovador explained their vote in favour. “This budget has been improving over previous years. This budget is the result of agreements and working together. We are a constructive opposition and we want to do what our Pope asks of us, to lend our hand to the country,” said Alejandro Snopek, a representative from Jujuy.