Argentina’s government on Tuesday announced more cash handouts for workers in the informal sector as Economy Minister Sergio Massa made one more play for the Presidency.
Styling the move as an attempt to alleviate the effects of inflation running at its highest level in 32 years and with less than a month to go before crunch a presidential election, Massa’s latest announcement in the latest in a series of bonus payments critics have dubbed ‘plan platita.’
His latest measure, which will reach between two and three million people according to the government, was announced on Tuesday on the last day that the ruling coalition candidate is allowed by law to lead government acts.
Massa, joined at a press conference by ANSES social security agency chief Fernanda Raverta, said informal workers would receive two 47,000-peso payments in October and November. Those eligible must be between 18 and 64 years old and must not have a registered income or receive existing welfare payments from the State, such as the Universal Child Allowance (AUH), Progresar scholarships or Potenciar Trabajo.
The bonus, totalling 94,000 pesos (US$256 at the official exchange rate), will be financed with an advance extraordinary tax imposed on firms in the banking and finance sector that have benefitted from the recent devaluation of the peso in the wake of the August 13 primary election, Massa said.
"The measure will be compensated through the collection of an extraordinary advance payment of profits to major taxpayers, and benefits a sector of the population that had not been reached by the economic measures taken in recent weeks to mitigate the impact of the devaluation imposed by the IMF," the Economy Ministry said in a statement released hours before the electioneering ban kicked in.
"In order to ensure that this measure does not end up affecting the public accounts and that we maintain fiscal order ... we have decided to charge an extraordinary advance payment on profits of those sectors that were the big winners of the devaluation imposed by the IMF, mainly banks, financial companies and insurance companies that will be notified tomorrow by the AFIP [tax agency]," said the presidential candidate for the ruling coalition.
The new cash handouts will complicate Argentina’s attempts to stick to agreed targets outlined in its US$44.5-billion debt programme with the International Monetary Fund. It comes less than a month after the government devalued the peso by around 20 percent in the wake of the PASO primaries, in which the ruling coalition finished third.
Meanwhile, runaway inflation is slashing the purchasing-power of Argentines. Price increases over the last 12 months surpass 120 percent, with prices up more than 80 percent already this year.
The bonus announced on Tuesday is the latest in a series of fiscal relief and cash handout measures taken in recent days.
Massa, who is currently polling second in the race for the Presidency and must make the run-off if he has a chance of winning the Casa Rosada, had previously trailed announcements for workers and small and medium businesses as they struggle to cope with economic turmoil.