Gov't announces further subsidy cuts

Economy Minister Amado Boudou and Planning Minister Julio De Vido announced today at a joint press conference, that the government will extend subsidy cuts to large companies and high income households. The move is expected to save the government about 3978 million pesos a year, adding to the 600 million pesos announced previously.

“The subsidy cuts will extend to the highest grossing companies in the fuel sector, natural gas production, biofuels, oil and agricultural chemicals; four sectors which will made an impact of $3,468 million pesos in subsidy cuts for the State,” said Boudou.

With regard to high-income homes, the government announced that Puerto Madero, Barrio Parque neighbourhoods and the gated communities of the country will have subsidies removed, a measure to be put in to place by January 1, 2012, which is expected to save around 500 million pesos. In addition, a register is to be created for high-earning families to voluntarily renounce subsidies. 

“None of the measures affect or will affect Pymes, who rank as one of the most dynamic companies in terms of creating jobs,” assured Boudou.

At the beginning of the month, Boudou and De Vido announced the removal of subsidies to utilities such as electricity, water and gas to the companies which demonstrate high profitability and that don’t need them.

Included within this group are financial groups, casino houses, international airports, ports and mobile phone companies under national jurisdiction, mining companies and hydrocarbon extraction companies.

In 2011 subsidies totaled 70,000 million pesos.