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A group of 50 senators presented a proposal that for the duration of the economic emergency the State give a “basic minimum income” to 34 million Colombians. According to his calculations, 40.5 trillion pesos would be needed during the next three months.
The idea is that formal and independent workers receive a monthly allowance of a monthly minimum wage with all the legal social benefits ($ 1,409,000) that would be delivered to 3.5 million people, while 9.5 million poor and vulnerable households (31 million people) would receive a monthly transfer of $ 877,000, for three months.
The National Government has already replied that it does not have money for this, that “There are no resources available” and, on paper, it seems so.
But Senator Iván Marulanda (Green Alliance), one of the 50 signatories, explains what the proposal is.
Basically what is the proposal that you approved in the Senate?
The support that the government is giving to companies and families is absolutely insufficient, and under these conditions we are going to have two results: one, the companies are going to fail and there is going to be enormous unemployment; and two, the families are going to despair in the houses due to hunger and they are going to leave, as indeed they have already thrown themselves into the street, creating an enormous risk of contagion, which can be unmanageable at the time of the peak of the pandemic which is in the month of June.
In this we are 50 senators from eight parties, the Green Party, the ‘la U’ party, the Polo, the Liberal Party, Senators of Radical Change, Decent, Colombia Humana and Mais.
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What do they propose to the Government?
I don’t know
We tell you this is insufficient and that is why we propose a subsidy of a monthly minimum wage, with all benefits, to formal workers, either those who are on the payrolls of companies or to the formal ones on their own account. They are 3.5 million people. Obviously those on the lowest income payrolls.
The other part of the proposal is for people who do not have formal jobs, for those households that live from informality, which are 9.5 million households, 31 million people, we propose a minimum wage without social benefits. This gives us to attend three months of the pandemic at a cost of 40, 5 trillion pesos, that is, 4% of GDP.
The hunger of the people does not give time, the bankruptcy of the companies does not give time nor does it give time in assisting the health system, which is about 7 billion pesos
And why three months?
I don’t know
Well, when the three months are over we will see what we do, because there we are all dead. For now let’s talk about what’s in sight.
Is that percentage of GDP sufficient?
This gives us 4% of GDP. What the government has already earmarked is worth 3% of GDP, that is, it would have to be increased by 1%.
And how is this going to be financed?
I don’t know
First, there are some items in the national budget that will be applied to this, which is Families in Action, all who are Seniors, what are Youth in Action, VAT refund, what is already legislated on solidarity tax . All that would go this package. And what is missing, a loan from the Banco de la República, immediately to attend to what is required, because this does not wait. The hunger of the people does not give time, the bankruptcy of the companies does not give time nor does it give time in assisting the health system, which is about 7 trillion pesos.
And is that only enough?
I don’t know
This is while implementing the following measures, an increase in the rate of wealth tax for natural persons, which is 1%, raise it to 10%, according to the size of the assets; To pay the debt with the Banco de la República, we propose an increase in the dividend tax, the expansion of the solidarity tax – which today is only paid by public employees who earn more than 10 million pesos – to the private sector and, for Of course, in the medium term, a structural tax reform that dismantles the benefits that are unjustified in the tax statute. Furthermore, we propose to dismantle once and for all the benefits provided by the growth law that was approved last year.
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How much would the Banco de la República credit be?
I don’t know
That credit could be, under these conditions, of more or less than 10 trillion pesos, which is one point of GDP.
Iván Marulanda, senator of the Republic
But this would generate a fiscal deficit …
Unquestionably, but how will this fiscal deficit be solved when we come out of the pandemic, with growth in the Gross Domestic Product, each point of recovery of the GDP means for the collection of state taxes 10 billion pesos. In other words, if there is growth of 1% above what we have, that would pay for that deficit. It is important to highlight that if companies fail there is no economic growth and unemployment becomes chronic and we enter a streak of economic recession and economic depression. This is so that the economy does not die our hands.
The government is putting money into this that is going to be lost, because it does not obtain the results that all Colombians expect, which is that small and medium-sized companies will not fail.
The investment budget for this year is slightly above 47 billion pesos and the director of the Dian said last week in Congress that this year they expect to receive 15.7 billion pesos less. And you say that only 7 trillion pesos are required for health. How do you intend to spend more than 40 trillion for just three months and, beyond that, leave an outstanding debt?
I don’t know
No, it is not three months, because after that the economy starts to work.
But we all wish that in three months everything would be working and everything normal …
I don’t know
No one, no one guarantees us that. We are talking about what is normally being talked about in planning the world over for these state interventions. State interventions are intended for three months. The truth is that no one knows what will happen here, if there will be a regrowth, if this will end someday.
There is an important point for this financing and that is that the Banco de la República credit must be replaced little by little with external credit, which is more delayed, because the Banco de la República credit is to be able to intervene now. Naturally, there is a need to set up international debt and refinance the debt. All this must be done but the shock intervention is with the credit of the Banco de la República
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But do you know that the government is going to reply that it does not have those resources?
I don’t know
This is about that we think differently. The government is putting a money to this that is going to be lost, because it does not obtain the results that all Colombians expect, which is that small and medium-sized companies, MSMEs, do not break, because there is 96% of Colombian companies And of course more than 90% of employment that cannot be broken and today everything is reeling.
POLITICS
