Javier Milei has once again set his sights on Trust Fundsa mass of resources close to 3 billion dollars and which seeks to eliminate it because it is considered part of the “black boxes” of politics. “I will make a decree that eliminates all trusts, which makes many nervous,” the president fired in an interview with LN+ on Wednesday evening.
The government has resumed its offensive after the defeat of the Omnibus bill in Congress and the conflict that erupted with the governors last week. One of the points that blocked the approval was paragraph “h” of article 4 of the project which gave Milei the power to “transform, modify, consolidate or eliminate specific public trusts, trusts or trusts.”
Practically all administrations have used – or attempted to use – trust funds or trusts. The reason is yours little transparencythe lack of specific objectives and which in some cases ended up working as a mechanism to divert public funds from parliamentary debate at the expense of other elements, according to specialists.
The first were created in 1995 during the management of Carlos Menem under the protection of privatizations and fiscal adjustment through the transfer of shares of YPF, Banco Hipotecario, profits of Lotería SE and loans with the rest of the world to assist the financial sector in the face of the threat of economic crises and allow the entry of private capital to the public infrastructure business.
Therefore, the funds financed with the direct transfer of Treasury funds or the creation of a tax and the transfer of its collection for a specific purpose (public works in infrastructure or housing, subsidies), while today those financed with transfers of budget funds prevail of the national administration.
Therefore, according to the Congressional Budget Office (CPO), the trusts went from 15 in 2012 to 28 in 2023with a faster growth rate of resources since 2018 during the administration of Mauricio Macri. These they went from 1.12% of GDP in 2012 to 2.08% in 2021while expenses were reduced by almost half, which generated a significant expansion of its financial surpluses.
In the 2024 Budget sent by Sergio Massa in September last year to Congress and never discussed, 29 trust funds with resources of $3 trillion (about 1.6% of GDP) have been planned for this year.more than half financed with Treasury transfers and the rest with taxes and property income (interest on credits, investments and Treasury bills).
This mass of funds is equivalent to around 3 billion dollars, much less than the 20 billion estimated by Milei in the last few hours, a calculation which would include, in addition to the trusts, 34 state companies and autonomous bodies such as AFIP or PAMI, as he declared the deputy José Luis Espert. Even so, the amount is still significant.
After cutting transfers, education funds and transport to the provinces, Milei now has another one in sight button to put pressure on the regulators, Municipalities and companies who receive subsidies from trusts. Since an important part of these funds comes from the Budget, the Minister of Economy, Luis Caputohe is the one who transfers the resources and disposes of them power to defund them.
The 9 most relevant trust funds:
1) Of the Transport Infrastructure System (FFSIT). In 2001, a decree was created diesel tax for the purpose of establishing a trust for infrastructure projects and the elimination or reduction of tollsbut today it is destined subsidize passenger transport companies (buses and trains). As of the third quarter of 2023, it has received $458,000 million.
2) PROCREATE. Created by decree in 2012, it aims to facilitate access to housing through mortgage loans and financial assistance. As of the third quarter of 2023, it has received $98,000 million.
3) Socio-urban integration (FISU). It was created by law and decree in 2019 to maintain trust ownership of all properties identified in the National Register of Popular Neighborhoods in the Urban Integration Process (RENABAP) and those necessary or convenient to carry out construction works. Social housing in popular neighborhoods between Municipalities, Provinces and social organizations. As of the third quarter of 2023, it has received $105 billionabove all from the COUNTRY tax.
4) For social housing. It was created by law in 2017 to finance existing social housing and basic infrastructure programs for low-income families, through a system of individual and/or collective credits. As of the third quarter of 2023, it has received $161,000 million.
5) Productive Development (FONDEP). A 2018 law provided for facilitating access to financing for projects that promote investments or contribute to the development of value chains in strategic sectors to support high-tech activities and businesses. As of the third quarter of 2023, it has received $160,000 million.
6) Argentine guarantees (FOGAR). The purpose of this fund is to grant guarantees in support of those issued by mutual guarantee companies, and to offer direct and indirect guarantees, in order to improve access to credit for companies carrying out activities in the country. As of the third quarter of 2023, it has received $219,000 million.
7) For domestic gas consumption incentives (FFGAS). Created in 2001, its purpose is to finance tariff compensations for the Patagonian Regiondepartment of Malargüe in the province of Mendoza and the Region called “Pune”, which zonal distributors or sub-distributors of natural gas and liquefied petroleum gas for domestic use must receive for the application of differential rates to residential consumption. As of the third quarter of 2023, it has received $78,000 million.
8) Subsidies for residential consumption of liquefied petroleum gas. With a 2005 law, provisions were made to ensure access to cylinder liquefied petroleum gas (LPG) for low-income users. As of the third quarter of 2023, it has received $61,000 million.
9) Provincial development. It was established by decree in 1995 to assist and finance development programs, increase the quality of performance and strengthen the sectors of the real economy, education, justice, health and security and consolidation of the fiscal and financial situation. Likewise, according to the Permanent Supplementary Budget Law of 2014, it helps the provinces and CABA to address financial deficits and regularize treasury arrears with respect to salaries and essential services. As of the third quarter of 2023, it has received $127,000 million.
Source: Clarin
