President Mauricio Macri interpreted Cambiemos’ victory in the midterm elections as an undeniable signal of support from the Argentine people, and didn’t waste any time seizing this influx of political capital to kick off what he believes will be a new era for both his administration and the country.
In an event held at the Kirchner Cultural Center (CCK), Macri outlined the main aspects of the structural reforms his administration hopes to implement in the next few years, calling the opposition, union, and business leaders present to support him.
“We are gathered to tackle all debts contracted during the past decades. Argentines have decided to consolidate the change [in the last elections]. We confirmed that it’s a deep, real change. We are better than the life we’ve been leading. We confirmed that a new era has begun. We are not taking no for an answer and are taking new, firm steps to continue improving, moving forwards, growing,” he said.
Macri went on to emphasize the need for more productive communication, arguing “how we decide to deal with each other is almost as important as the final result.” “The only way to close wounds is by telling us the truth. Seeking dialogue and peace. If we can’t reach basic consensus, there will be no basic consensus, no investment, productivity, legal security and the business sector won’t be competitive,” he said.
The only high-profile opposition leader who didn’t attend the event was the leader of the Victory Front (FpV) caucus in the Lower House, Héctor Recalde. When consulted about his decision, he remarked, “it’s pointless” to attend. “I’m interested to learn about the content [of the reforms], we’ll see what happens,” said Recalde, who assured that “the institutional debate will take place in the Parliament.”
The rhetoric of Macri’s speech focused on a desire to reach a “great national agreement” in order to being working towards two big goals: creating quality employment and reducing poverty. According to La Nación, the President has decided it’s time to sit down and discuss the issues that can’t be tainted by partisan politics.
Referring to this, Macri called the leaders present to “reach basic consensus.” “A road map that will provide stability and lead to a more just, integrated Argentina, where everyone has a life project,” he explained.
In order to do so, Macri outlined the three axes around which the initiative will revolve: reforms to labor laws, the tax code, and improving institutional quality. We’ll go over them one by one and briefly describe the government’s main goals for each:
Reforms to Labor Laws
The Macri administration has no plans to sanction a law modifying the existing rulebook. Instead, it wants to negotiate agreements with each sector, such as the ones reached with the oil unions working the Vaca Muerta field, and the milk union workers.
Since the agreement with Vaca Muerta workers was reached, Labor Minister Jorge Triaca assured, “Fracking activities quadrupled.” “It’s a massive increase in productivity,” added Triaca when defending the initiative. The country’s main union leaders assured they’re open to dialogue with the government, but will reject any initiative aimed at changing the most important labor laws.
Macri believes “work has to be considered as the axis around which people’s life projects revolve.” “[We’ve got to] create more and better jobs for millions of Argentines. We’ve got to set rules that encourage private and formal work.” With this goal in mind, he said that “in the next days we will present a set of initiatives that we are already discussing with representatives of the labor sector” aimed at “formalizing informal work.”
Moreover, Macri emphasized the need to fight what he calls “mafias surrounding the labor lawsuits industry;” this group of lawyers and judicial officials who, in his opinion, take advantage of highly protective labor laws in order to drain money from employers.
Finally, he said the state has to create a framework to favor job creation. “[We’ve got to] reduce taxes for businesses, infrastructure costs, make it easier for them to access credit. We need a rulebook that is appropriate and helps us to integrate to the world in a positive way by making a slow and complicated state a thing of the past,” he pointed out.
Interior Minister Rogelio Frigerio anticipated that the government is working on a reform that “allows us to continue in this path to reduce tax pressure.” “The most important initiatives are aimed at continuing taxing credit and debit cards until at least 2019, start taxing the so called ‘financial income’ – according to press, it will be a 25 percent tax on the revenue generated by deposits that are over half a million pesos and would include Lebacs – and gradually reducing the gross income tax (Ingresos Brutos) collected by provincial and district administrations.
Regarding this axis, Macri argued the state can’t spend more money than it collects. “We need to move towards a surplus. That’s not negotiable. We are not administering our money, it’s Argentines’. We need to do it responsibly,” he began.
The President went on to criticize the high inflation rates the country has had recently, and pointed out that this year’s will be the lowest since 2009. “All our neighbors have beaten it. We have to make a commitment to never have high inflation again. We need stable currency,” he added.
Finally, Macri argued about the need to discuss the current pensions system. “We are proud of our wide coverage. But we know that our system is not sustainable. There shouldn’t be special pensions and special regimes that allow some to retire at age 40, 50, while others have to work until the age of 65. The system will continue to be universal, but it also has to be fair,” he said.
Improving Institutional Quality
Reform to the Judicial Branch
According to Infobae, the project has 120 initiatives, so we’ll go over the five most important ones for concision purposes. The government wants to reform the Council of Magistrates (Consejo de la Magistratura) – the entity in charge of appointing and removing judges, among other things – to make it less political; change the process by which prosecutors are removed: the idea is for Congress to be able to remove them with a simple majority, rather than the current, special, one (two thirds of the lawmakers present at the session).
It also wants to grant prosecutors more power, and enable them to make decisions during the investigation of a case, as they now have to get authorization from a judge to move forwards with an initiative.
Furthermore, the Macri administration wants to reform the civil, commercial and criminal procedural law; increase the speed with which lawsuits are solved and make it easier for the most vulnerable sectors of society to access the judicial system.
The government already tried to introduce this reform last year, but its efforts proved unfruitful. They intend to give it another shot. The reform’s main aspects are the introduction of a single ballot – this was the most controversial part of last year’s project, as opposition parties rejected the Cambiemos’ intention of introducing an electronic ballot, arguing it could be easily hacked – the synchronization of the electoral calendar and the creation of an independent electoral council.
“[We need to] strengthen the republic. We need a state that’s not at the service of its officials or unions, but its citizens. We have to initiate a path of transparency to fight against corruption, as Argentines have decided they want to live in a republican democracy,” Macri stated.
A More Efficient State
Macri continued delivering his speech along the same line, arguing that the “cultural change we are going to implement chases concrete goals”: “to have a state that’s at the service of society. We need to consolidate institutions people can trust. We want a country in which corruption is intolerable. We have to eradicate the culture that doesn’t punish corrupt officials who embezzle public funds because they also work,” he said.
In order to reach this goal, Macri said it’s key to start reducing the number of public workers. To back up his claim, he said that the amount of people working at Congress’ Library increased from 500 to 1,700 in the past years, when, for example, only 250 people work in its Chilean counterpart.
Macri finished by addressing the people present at the announcement, telling them they need to “draw an austerity line for what’s coming.” “Those of us who are here, we are privileged. We have had access to possibilities that many Argentines don’t. We have to lead with the example, there’s nothing more powerful than that. There are changes that we have to implement as quickly as possible so Argentines can be lifted from poverty and the middle class can grow. We have seen where shortcuts lead,” he finished.