Sunday, May 26, 2024

ARGENTINA | 30-04-2024 14:22

Omnibus bill backing opens door to privatisation of state firms, labour reform

Lawmakers in lower house back key chapters of President Milei's reform bill, opening door to labour reform and the privatisation of state firms – provided Senate gives its backing.

President Javier Milei has scored his first legislative victory of note, with lawmakers in the Chamber of Deputies granting general approval to his omnibus bill.

The proposed legislation, which will deliver major reform to Argentina’s heavily regulated economy if it passes into law, secured 142 votes in favour, 106 against and five abstentions after a marathon session on the floor of the lower house.

In a mostly low-quality debate lasting more than 20 hours, lawmakers were often at each other’s throats, with those in favour calling on their peers to deliver historic change to Argentina and critics warning of the potential damage the bill could have.

Milei’s La Libertad Avanza party – firmly in the minority in both houses of Congress and needing support – obtained the backing of the right-wing PRO party and mixed Hacemos Coalición Federal bloc. Some deputies from the Unión Cívica Radical (UCR) and Innovación Federal (made up of deputies from Salta, Misiones, Río Negro and Neuquén) caucuses, along with the Movimiento Popular Neuquino (MPN), also approved the bill.

Peronists grouped under the Unión por la Patria (UxP) caucus rejected the bill, as did left-wing Frente de Izquierda de los Trabajadores (FIT) deputies. Natalia de la Sota, Mónica Fein and Esteban Paulón of Hacemos Coalición Federal also voted in opposition.

The five abstentions came from the Radical bloc, led by Facundo Manes, with Mónica Frade (Coalición Cívica) joining. Absent were Sergio Acevedo (Por Santa Cruz), Álvaro González (PRO) and Roberto Mirabella (UxP).

Lawmakers are voting on the mega reform bill’s 232 articles one-by-one, but a number of key chapters have already won approval.

An accompanying fiscal package will be put to a vote after the main law’s treatment is finished.


Privatisations on way

One of the bill’s most hotly debated chapters addressed the privatisation of state companies. That section sailed through, authorising the possible privatisation of four public companies, including national airline Aerolíneas Argentinas, and the potential sell-off of another five, most likely as concessions. 

The four to be sold off are Aerolíneas Argentinas, Energía Argentina SA, Radio y Televisión Argentina and Intercargo SAU. The latter group includes Agua y Saneamientos Argentinos SA, Correo Oficial de la República Argentina, Belgrano Cargas y Logística, Sociedad Operadora Ferroviaria and Corredores Viales.

Lawmakers also improved a controversial new investment incentive scheme. The Régimen de Incentivos a las Grandes Inversiones, or RIGI, grants special dispensation for investments of more than US$200 million, granting a "framework of legal certainty."

Deputies also approved a motion to eliminate a pension moratorium put in place by former president Alberto Fernández's government that allowed those who had not reached 30 years of pension contributions during their working life to have access to a minimum pension. 

Milei's government considers that scheme unfair. A new system will replace it through which retirees are given an amount related to their years of contributions, with a minimum floor of  80 percent of the official pension.


Labour reform

Among the key chapters in the bill is a sweeping labour reform plan, the details of which were negotiated fiercely over the past week.

Trial periods for workers, which Milei wanted to extend dramatically, will now be set at six months for companies with more than 100 workers, eight months for firms with between six and 99 workers and one year for small companies with up to five workers. However, a worker can only be hired under a probationary period once and the abusive use of the new rules will lead to sanctions. 

Also deleted from the bill’s original text was a controversial article that established penalties of between six months and three years in prison for those who blockade companies during  wage and labour disputes.

Fines for the registration of informal workers into company books were also cut. 

The passage of the law comes a day before International Workers’ Day, a traditional holiday on which employees worldwide mobilise in support of workers’ rights. A national strike has also been called for May 9 by the CGT umbrella union group.

Buenos Aires Province Governor Axel Kicillof expressed disappointment at the outcome and called on his Peronist colleagues in the Senate to vote it down.
"A dreadful law is being passed. We are going to make sure that no-one else betrays the people," said the Kirchnerite leader. 


Milei mostly quiet

At the time of writing, President Milei had yet to comment personally but a number of his congressional allies did. The head of state replied to and retweeted messages of celebration, with PRO deputies Fernando Iglesias, Hernán Lombardi and Presidential Spokesperson Manuel Adorni first among them.

Milei initially followed Monday’s session remotely from the Olivos presidential residence, but later travelled to the port of Buenos Aires to oversee the reception of a ship from the United States. 

The USCG Cutter James arrived in the capital ahead of a series of joint exercises with the Prefectura Naval Argentina at the limit of Argentina’s Exclusive Economic Zone related to the combatting of illegal fishing.

The President was joined by US Ambassador to Argentina Marc Stanley, National Security Minister Patricia Bullrich and presidential-chief-of-staff, his sister Karina Milei, as he observed the vessel’s arrival in Buenos Aires.

He watched Tuesday’s session from Olivos, while Karina Milei headed to Congress to observe proceedings from a balcony, where she sat alongside Interior Minister Guillermo Francos.


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