After a year in government, Argentina’s President Javier Milei announces that even more drastic reforms are to come, first and foremost a reduction in bureaucracy and a tax reform. In the end, there should only be six taxes.
Source: Tichys Einblick, editorial office, 23 Dec. 2024
Argentina’s President Javier Milei has announced that the “deep chainsaw” is coming. In an interview with Forbes Argentina, the libertarian politician said that his government had so far only implemented a quarter of what he had planned. There will be a drastic reform to shrink the state even further.
“We will continue to reduce regulations, we will increase economic freedoms. This year, Argentina has climbed 70 places in the economic freedom index. Previously we were among the 35 worst-placed countries, now we are in the middle of the field,” explained Milei when asked.
“But we have only implemented a quarter of the reforms so far,” continued the President. A further 3,200 were still outstanding. The privatisation agenda would be continued, Milei announced a labour and pension reform.
“Not only that, but we will also abolish 90 per cent of all taxes,” the Argentinian politician said. He emphasised that he was not referring to 90 percent of all tax collections, but rather a tax reform that would provide a better overview. “That means introducing a system that comprises no more than six taxes.” The interviewer asks incredulously: “All this in 2025?” Milei: “Yes, that’s the programme for 2025.
Summary by Sofie Walker:
Subsidy cuts and austerity measures under President Milei in Argentina
President Javier Milei has implemented a comprehensive austerity programme in Argentina, which has led to significant improvements in public finances:
- The losses of state-owned companies were halved in the first nine months of 2024 compared to the previous year – from USD 4.551 billion to USD 2.235 billion.
- The number of employees in state-owned companies fell by 11,081 from 92,069 to 80,988.
- Just one month after taking office, a balanced monthly budget was achieved for the first time in over a decade.
The central measures were:
- Raising prices for services and goods of state-owned enterprises to market level
- Termination of numerous subsidies
- Job cuts and closure of entire departments in state-owned enterprises
- Planned privatisation of companies such as the postal service and the state-owned airline
Despite the progress made, most of Argentina’s 33 state-owned companies are still making losses. The government is striving for further privatisations, but is encountering resistance from the trade unions.
