Argentine Economy Minister Amado Boudou and Planning Minister Julio De Vido announced on Friday further subsidy eliminations for utility services particularly in the City of Buenos Aires, which follows on previous subsidy cuts to several sectors implemented last month by the government of Cristina Fernandez.
During a press briefing at the Economy Ministry the two ministers informed that Buenos Aires City state buildings, the street lighting service and City highways firms will stop receiving government subsidies.
This federal government said savings with the elimination of these subsidies should represent 230.5 million pesos.
The two ministers also announced more neighbourhoods, allegedly with a majority of high income residents, will stop receiving utility subsidies. The measure is extended to residents living in the areas surrounding the Libertador Avenue, one of the most expensive of the city and downtown next to San Martin square and the Retiro railway central station.
However Minister De Vido announced that residents who live in these areas, and are within the general law allowance to be able to be excluded, should put forward their request, for their claim to be processed.
Boudou said the announcement was not ‘fiscal but rather a re-positioning of subsidies’ based on two main premises: improve equality and sustain competitiveness.
De Vido said an estimated 28.600 residents will now see the subsidies eliminated which represent 367 million pesos and since the system was first implemented it involves 275.504 residents and savings of 4.847 billion pesos (over a billion dollars).
“We need to sustain the subsidies system for some consumers so that they help the domestic market and competitiveness”, said Budou and as to the end of subsidies for many services and buildings in the City of Buenos Aires he argued, “it’s not reasonable to continue supporting some of the city’s services and public lighting, when city taxes suffered a hefty increase”
Buenos Aires City Mayor, conservative Mauricio Macri who was surprised by the announcements said he favours the elimination of subsidies as a matter of policy but in this case it was “suddenly”. However “we shall have to work hard and keep to a tough austerity”.
But the head of Macri’s political group in the Lower House, Deputy Federico Pinedo was more explicit saying the decision was clearly a ‘punishment for the residents of Buenos Aires City”.
”Evidently this is an attack on the City of Buenos Aires. If the argument is that the City’s budget must be pruned, the budget that supports the metropolitan police, the health system in hospitals and to pay teachers’ salaries, it is clearly an childish attitude”, said Pinedo.
Mayor Macri and his Conservative PRO are one of the few successful opposition groups that survived unscathed the landslide victory of President Cristina Fernandez last October.