Second withdrawal of 10%: government project manages to entangle opposition reform

The opposition’s constitutional reform to withdraw another 10% of the AFPs seems to have slowed down, after the government introduced a bill on Wednesday with the same objective, but limiting the universe of people who can access to withdraw pension funds , and including taxation.

So far, neither of the two initiatives seems to have guaranteed votes to pass. The government is clear that the project that entered will not come out as is, and is willing to give in most of the points, but the minimum floor they expect to have is that withdrawals are taxed. The rest, everything is negotiable, say government sources.

Although from the opposition they were opposed to several proposals made by the Executive in this initiative, the truth is that precisely on the subject of taxes some parliamentarians are willing to give in. An example of this is what Senator Carolina Goic (DC) said this Thursday when the United Finance and Labor commissions met for the first time to see the government project. The president of the Senate, Adriana Muñoz (PPD), also said on radio Duna that this topic is conversational.

In the session, the senators were open to discussing the initiative, but they were also against some of the proposals, mainly in the obligation that affiliates who withdraw funds must repay them on a mandatory basis, and that there be 60 business days for the AFPs make the first payment.

In the instance, the Minister of Finance, Ignacio Briones, explained that the fiscal cost of the government project is about US $ 2,154 million, versus that of the opposition, which implies about US $ 3,229 million.

Rather than criticize some specific proposals of the government project, the senators focused on showing their annoyance, because the Executive did not take part during the processing of the first withdrawal of funds to debate and limit it. They also reiterated criticism for not arriving on time with aid when needed. But there were no threats to reject the project outright.

There would be two reasons behind this tense calm. In the first place, the opposition is clear that today it does not have guaranteed votes for its reform after the government managed to align the majority of Chile Vamos, and they project that it will be rejected when the vote is taken in the hall. In this way, they plan to vote on the government project, but rejecting all the articles that are not to their liking. For what they do recognize that there are votes, is that withdrawals pay taxes.

In parallel, the ministers continue to negotiate with the opposition to reach an agreement on the pension reform. Government and opposition sources indicate that the Executive would have yielded more solidarity, and it would be close to 6% to a common fund, as the opposition wants it. In fact, it would only be necessary to refine the details on this issue that has been the one that has trapped the project for so many months: the distribution of the additional contribution.

But where the negotiations would be slowest is about what to do about the AFPs. The opposition wants to make a political point and for the industry to be divided, so that they are mere managers of funds, and not individual accounts. The problem that the government sees with this formula is that it could make the system more expensive, since economies of scale are lost, so that has been the subject of debate in recent weeks. It is also on the table to tender the stock of affiliates, but gradually through packages.

Government sources warn that, if the opposition’s constitutional reform to withdraw 10% is approved, it would be difficult to advance in a pension reform, as the ministers have stated.

On the other hand, the government’s idea of ​​going to the Constitutional Court (TC) for the withdrawal of 10% of the opposition still stands. The point they want to make here is to cut the bad practices of circumventing the Constitution, they point out from La Moneda, but also to set a precedent so that there are no future withdrawals by way of constitutional reforms.

Although the government managed to align a large part of Chile Vamos, not all senators were 100% square with the Executive, but they gave signs of supporting the initiative in case the same changes that the opposition requests are made, and that the Executive I’d be willing to give in

Senator RN Manuel José Ossandón affirmed that “I am not willing to support the government’s project in the conditions it is in,” he said on Radio Futuro this Thursday, warning that they will only have him if “scissors are put into that project.”

Along the same lines, Senator Juan Castro (RN) expressed his criticism of the government’s initiative: “The President gives us this project and it doesn’t seem very good to me, there are several indications that I think should be removed, I don’t know what will to determine the United Labor and Finance Commission, I want to see that discussion and I want to see what project will reach the room ”.

Senator UDI Iván Moreira, more ambiguous, only promised to “vote in conscience.” “I want to point out that I appreciate that the government has been involved, recognizing that 10% was an imperative. However, we cannot fail to point out that the government legitimized the first withdrawal by not going to the TC and that today confuses the public with the new announcement of going to the TC for the second withdrawal, ”he said.

Only Senator José Miguel Durana (UDI) closed ranks publicly with Briones and his initiative. “What the government has done is respond to the call we made. This project will be able to meet the challenge that this withdrawal of 10% reaches those who need it most before Christmas, while the other will go to the Constitutional Court ”.

For her part, the president of the Senate acknowledged that they will have to check if they have the votes to approve the opposition project. In fact, although they planned to vote on this initiative in the room next Wednesday, that has not yet been settled, since there was no agreement from the room to see it that day, so the committees would see it between Monday and Tuesday. Anyway, the vote for Wednesday is ahead.