July 25, 2014
Gov't announces new subsidy scheme
Economy Minister Axel Kicillof and Planning Minister Julio De Vido have announced changes in the gas and water subsidies scheme, involving "not the end of subsidies but a redistribution” of resources that aims at "strengthening" the government’s “economic growth with social inclusion” model.
"A vindication of the government’s subsidies’ policy," Kicillof affirmed while addressing reporters at the headquarters of the Economy Ministry this morning to announce cuts in gas and water subsidies that will go from 17-80 percent varying in each area and depending on households consumption rates.
The minister pointed out that those who manage to reduce the consumption of gas and water by 20 percent in a year-on-year averager, will still benefit from the allowance in the tariff.
The new scheme, the Economy minister explained, will allow a surplus to be re-allocated in the Universal Child Allowance and Progresar social programs, the Kirchnerite-sponsored cash transfer the first for low income families on condition their children attend school and receive regular medical check ups and a financial benefit for 18-24 years olds the second who want to finish or begin their school or university studies.
“We stand for the idea of a state that has to be present to improve people’s life conditions but also to create purchase power that underpins the sustained economic growth reached over the past decade,” Axel Kicillof assured and pointed out the industrial sector will be exempt from the new subsidies scheme. But the minister warned the government will "monitor" manufacturers to prevent “disproportionate” tariff hikes or shortage scenarios. “This is everybody’s efforts,” Kicillof insisted and added the Cristina Fernández de Kirchner administration "is still committed with its subsidies’ policiy, to improve Argentineans income and invigorate the domestic market."
Last week, a report released by the Buenos Aires province Economy Ministry showed the wealthiest 20 percent of the population nationwide receives 30 percent of subsidies, while the poorest 20 percent receives just 12 percent.
On his behalf, Planning Minister Julio De Vido was in charge of briefing the press on the new scheme’s details. The “redistribution" of resources will be a three-stage plan to be set in April, June and August.Among those who will not be reached by the 20-percent cut in gas and water subsides, will be gas cylinder users who still lack the natural gas service and the provinces of Formosa, Chaco, Misiones, Corrientes, the northern area of Entre Ríos, the northern area of Santa Fe and some districts in Santiago del Estero. The new subsidies policy will not include those benefiting from state allowances either.