2024-02-16 21:05:53
The national government announced the elimination of trust funds for US$ 2,000 million and framed the decision in the conviction of moving forward “against all political boxes.”
The announcement was made by the spokesperson for the Presidency, Manuel Adorni, in his usual press conference at the Government House and was immediately confirmed by President Javier Milei himself in an interview with Radio Rivadavia.
“We are going to advance on that and we are going to go against all the political boxes,” said Milei when asked about the decision announced moments before by Adorni.
In his usual press conference, the spokesperson said that President Javier Milei had decided “eliminate certain trust funds” on the grounds that they “lack transparency” and represent an expense “around US$2 billion” annuallywhich means, he assured, “half a point of the Gross Domestic Product.”
Adorni pointed out that these funds “are part of what we call ‘politics boxes'” and considered it “striking” that “politics do not agree to make millionaire funds transparent that no one knows exactly how they use the money.”
Meanwhile, Milei said: “We are going to go all out and we are not going to lower our arms because we govern with the people in mind and politics does not see that.”
Adorni announced that Milei “decided to eliminate certain trust funds,” although he did not specify which of the 28 existing in the orbit of the national State, according to a survey carried out by the Congressional Budget Office (OPC), will be reached by the measure.
“We appeal to politics to understand that transparency has to be above everything and to give rise to what we propose in the Omnibus law, which is the elimination of these funds,” he urged.
According to an OPC study from January 2023, “the proliferation” of trust funds “violates the unity of the national administration’s cash flow, increasing the financial needs of the National Treasury.”
“While an area of the national administration secures resources to meet its objectives through a trust fund and in some years (such as 2021 and 2022) accumulates liquidity, on the other hand there is a risk of definancing the Treasury, causing a worsening of the fiscal situation and in the medium term threatening the continuity of the objective that was originally intended to be promoted through the creation of that fund,” said the bicameral entity.
The OPC noted that “the economic and budgetary importance of this institutional sector warrants making the necessary efforts to increase transparency and understanding of the destination of the allocated budgetary resources.”
Trust funds are not included in the central government budget and do not have a uniform creation methodology.
For example, the OPC observed that some “were created by law (Trust Subsidy for Residential Liquefied Petroleum Gas Consumption – law 26,020), others by DNU (Airport Security Infrastructure Fund – DNU 1334/14), others by decree (Fund for Business Reconstruction – Decree 342/2000) and others simply by ministerial resolutions (Trust Fund for Interprovincial Electric Transportation – Resolution 657/99 of the Ministry of Economy)”.
The 28 trust funds of national jurisdiction, in chronological order of creation, are as follows:
1990: Trust Fund for Scientific and Technological Promotion (Foncyt)
1995: Provincial Development Trust Fund
1997: Social Capital Trust Fund (Foncap)
1997: Federal Regional Infrastructure Trust Fund
1999: Federal Electric Transportation Trust Fund
2001: Transportation Infrastructure System Trust Fund
2001: Water Infrastructure Trust Fund
2001: Trust Fund for Residential Gas Consumption Subsidies
2001: Trust Fund for the Recovery of Sheep Activity (FRAO)
2003: Mortgage Refinancing Trust Fund
2005: Homes with Carafe Program (Home)
2012: Argentine Bicentennial Credit Program Trust Fund for Single Family Housing (Pro.Cre.Ar)
2013: National Fire Management Fund
2014: Unive Service Trust Fund for the Argentine Digital RSAL
2014: Airport Security Infrastructure Trust Fund
2015: Trust Fund for the Development of Renewable Energy (Foder)
2016: Trust Fund for Social Housing
2016: Productive Development Trust Fund (Fondep, former Fondear)
2016: National Agroindustry Trust Fund (Fondagro)
2016: Trust Fund for Universal Health Coverage
2016: Trust Fund for the Environmental Protection of Native Forests
2017: Trust Fund for the Development of Entrepreneurial Capital (Fondce)
2017: Trust Fund for the Distributed Generation of Renewable Energy (Fodis)
2017: Argentine Guarantee Fund (Fogar)
2017: PPP Safe Highways and Routes Trust
2019: Trust Fund for Direct Assistance to Victims of Trafficking
2021: Domain Regularization Regime for Socio-Urban Integration
2021: Trust Fund for the Promotion of the Knowledge Economy.