The rebellion of the Buenos Aires government regarding compliance with the care measures announced by the national government in this second wave, which even escalated to the judicial level, revealed a large deficit: little presence of the State of the richest district in the country in the application of economic measures to contain the impact of the crisis produced by Covid-19.

Since the pandemic and the care measures that restrict circulation began, the national government launched a battery of measures designed to sustain family income, assist companies and invest in social and health infrastructure. The executive director of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, particularly highlighted this “fiscal effort” that was around 4.9 percent of GDP, even above the regional average that was 4.1 percent.

Nation

The two most important measures adopted by the Alberto Fernández administration to sustain the income of families, while assisting companies during 2020, were the implementation of the Emergency Family Income (IFE) and Emergency Assistance to Work programs and Production (ATP), which together benefited about 11 million people. The Emergency Family Income consisted of three payments of 10,000 pesos. It reached 9 million people and meant a total investment of 270,000 million pesos, 1 percent of GDP. In the case of the ATP, more than 2,700,000 workers received (at least once) part of their salary from the State, with direct deposits in the bank accounts of each of the beneficiaries.

For companies, in addition to the ATP, the government provided credits at a zero rate for self-employed and monotributistas, at a subsidized rate for MSMEs, reduction of employer burdens and unemployment insurance.

To maintain family income, other important measures were family allowances (universal child and pregnancy allowance). Food policies such as the Alimentar card for more than 1.5 million families and food supplements that provide assistance to around 22,500 school and community canteens. Finally, the Boost Work plan aimed at absorbing part of the informal market work that did not recover its pre-pandemic level of activity.

According to the Observatory of the Argentine Social Debt of the UCA, without the assistance of the State, poverty would have reached 52 percent and indigence 25 percent in 2020 (well above the real data of 42 and 10.5 that it published the Indec, respectively).

The measures announced at the end of May to mitigate the impact of the second wave of Covid reinforce this path: for companies, the Productive Recovery Program (Repro) was expanded to serve the sectors that will be affected by the measures, it increased the amount of the supplementary salary for workers in critical sectors and health; Repro joined the gastronomic sector and employer contributions were reduced in critical sectors.

For families, the Alimentar Card was expanded and money was transferred to beneficiaries of this card, in addition to the Progresar Program with scholarships to finish primary school and a new expansion of the AUH and family allowances. These policies reach 6 million girls, boys and young people and entail an expense in excess of the 480,000 million pesos (1.3 percent of GDP) established in the 2021 Budget. The increase in spending, the government assures, will be financed through the higher income explained by the Extraordinary Contribution in Large Fortunes and the increase in collection.

PBA

Since the isolation began, the Government of the Province of Buenos Aires had a strong State presence with tax exemption programs through ARBA; credits at subsidized rates for the purchase of capital goods, inputs and raw materials and purchases of materials to improve housing through Banco Provincia; The Preserve Work Program was launched, which complements those from Buenos Aires who did not qualify for Repro II, which with this second wave made some incompatibilities more flexible in order to increase the number of people reached. The Ministry of Production transferred 1.3 billion pesos to assist critical sectors such as tourism and culture.

“The province of Buenos Aires is the one that has taken the most tax relief measures since the pandemic began,” said ARBA executive director Cristian Girard. At the tax level, laws were enacted that include a general moratorium on property taxes for three million taxpayers and 3,800 SMEs, and the creation of the simplified monotax regime for one million Buenos Aires. Multiple payment schemes were proposed to regularize past due debts of gross income, basic real estate and motor vehicles, and the suspension of judicial liens until August was determined. In addition, gross income will not be charged to the sectors most affected by the pandemic, such as theaters and movie complexes; discos and party rooms; restaurants and bars; sports establishments; kindergartens and child development care centers.

A social investment plan is carried out that amounts to 70 billion pesos and that has allowed the addition of 300 thousand new beneficiaries to the School Food Service, reaching two million children and adolescents in the 135 municipalities of Buenos Aires.

CABA

During the first 14 months and eight days of the pandemic, the City government limited its participation in the cancellation of the ABL to non-essential businesses, hotels and gastronomy; exemption from gross income to gastronomic establishments and private sanatoriums; and moratorium on ABL and patents on businesses. In 2020, it announced credits at a 12 percent rate to non-essential businesses and gastronomy.

To this second wave of Covid and criticism from a large part of the political arc for the passive role that the richest district in the country took, despite the fact that even the IMF recommends doing it as an effective exercise to mitigate the effects of the economic crisis, the Horacio Rodriguez Larreta’s government responded with more of the same: tax exemption measures for a few months, especially Gross Income and ABL to critical sectors and preferential fixed rate loans for working capital to gastronomic companies, in the same line as in 2020.

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