Argentina’s Chamber of Deputies approves Milei’s Basic Law, a leaner economic reform project | World

After the failure of the so-called “Ómnibus Law”, the Argentine Chamber of Deputies approved this Tuesday (30) the Basic Law, a new project for economic and state reforms by the country’s president, Javier Milei.

Now, deputies will vote on specific points of the project, which will pass to the Senate.

The project was approved after 20 hours of debate, which began on Monday night (29) and went into the early hours and morning of this Tuesday, and by 142 votes in favor, 106 against and five abstentions.

Right at the beginning of his government, Milei issued a Necessity and Urgency Decree (DNU), a kind of provisional measure, and sent an “omnibus law” project to Congress. Both suffered defeats in the Legislature.

The approved Basic Law is a new, reduced version of the “ómnibus law” (the formal name of the “ómnibus law” was also Lei de Bases). Furthermore, a tax package was approved.

The text of the “omnibus law” that was taken off the agenda in Congress on February 6th, originally, had more than 600 articles. This new version of the Basic Law there are around 250.

However, this new text incorporates an important part of the “decree”: labor reform.

When the Milei government lowered the DNU, the Justice prevented part of the labor reform from coming into force, as these rules could not be changed via decree. Now, the changes have been reduced and will become part of the Basic Law.

This new labor reform, however, is much leaner. The number of articles decreased from 60, in the “decree”, to 17 in this approved proposal.

The government withdrew measures that restricted the power of unions and that could be a reason for conflicts. For example, one of these articles that fell by the wayside was a restriction on the right to strike activities considered essential, and another ended with a mandatory contribution that non-unionized workers paid to unions.

Among the measures that entered the text of the “Basic Law” are:

• The creation of a six-month trial period for newly hired people.
• The end of fines for entrepreneurs who hire unregistered employees.

In terms of privatization, the new Basic Law excludes two important state-owned companies from the sale program to the private sector. The government gave up selling Banco Nación and Aerolíneas Argentinas.

The new text also has a change in relation to the original “ómnibus law”: it has a list of bodies that cannot be dissolved by order of the federal governmentsuch as the National Institute of Cinema and Audiovisual Arts (Incaa) and the National Entity of Communicators

The text prohibits the Executive from intervening in national universities, the Judiciary, the Legislative Branch and the Public Ministry.

See below a report about a protest by university students against the freezing of transfer amounts to public universities in the country.

This reduced version of the Basic Law still gives the Executive the power to restructure government bodies, privatize companies and change rules to attract investment.

Argentina: 150 thousand people protest against cuts in public universities

In addition to the Basic Law, the Chamber also approved a package of tax changes at the same time.

The tax reform package includes a program to regularize undeclared capital and a reduction in tax on personal assets. The text increases income tax for those with high incomes.

According to Lucas Romero, from Consultoria Synopsis, the federal government included articles that guarantee an increase in revenue for provincial governments. It is a tactic to try to receive support from provincial governors.

“That’s why the two initiatives will be approved: the governors want the fiscal package and are more willing to accompany the government in (voting on) the Basic Law.”

If the Basic Law is approved in the Senate, it will be the first law that the Milei government will be able to approve.

The number of government deputies is low, and to be able to approve it, it will be necessary to count on the support of circumstantial allies — in Argentina, they were called “dialoguers”, that is, those willing to dialogue.

Lucas Romero, from Synopsis consultancy, stated that, for Milei, it is important that the law is approved because he needs to demonstrate that he can govern. “He has to enshrine his intentions to change (the country) in laws. The International Monetary Fund (IMF), which is Argentina’s auditor, is the one asking for this.”

The analyst makes a comparison:

• Milei has not yet managed to pass a single law.
• Every left-wing president since 2000 has managed to pass the first laws in less than 10 days.
• Maurício Macri, from the moderate right and who governed in a minority between 2015 and 2019, took 28 days to be able to renegotiate the debt.

Ana Iparraguirre, partner at political strategy consultancy GBAO, Milei needs to boost investment and show signs that her plan is sustainable because in these months of fiscal adjustment economic growth was low and soon there will be no way to continue reducing government spending.