Daily Reports
Milei's Legislative Victory Marks a Turning Point for Argentina
After six and a half months in office, Javier Milei celebrated the approval of his first package of laws. The Bases Law, aimed at transforming Argentina under his ultra-liberal creed, received 147 votes in favor, 107 against, and 2 abstentions in the Chamber of Deputies after a marathon 13-hour session. Despite needing to negotiate with the opposition, Milei succeeded in securing extraordinary legislative powers in various sectors, including administrative, economic, financial, and energy. The approved law includes measures for dismantling the state apparatus, deregulating the economy and labor market, privatizing public companies, and implementing tax reforms.
Concessions and Negotiations
Throughout the legislative process, Milei's government made numerous concessions. The number of public companies set for privatization was reduced from 41 to 8, excluding major entities like Aerolíneas Argentinas, YPF, Banco Nación, and others. Pension reform plans were also scaled back, and the scope of the new Large Investment Incentive Regime (RIGI) was limited to specific sectors. Despite having a minority in both legislative chambers, Milei's ruling party relied on alliances with the PRO and negotiations with opposition blocs to achieve approval. The support came mainly from the Radical Civic Union (UCR), non-Kirchnerist Peronism, and provincial forces.
Controversial Tax Reforms
The fiscal package, which included restoring the income tax for high-paid workers and reducing the tax on personal assets, sparked significant debate. The ruling party managed to ratify the fiscal package with tighter results compared to the Bases Law. The income tax restoration was approved with 136 votes in favor, while the personal assets tax saw 134 votes in favor. More than 70 unions announced plans to challenge the tax reforms in court, citing unconstitutionality. Despite these challenges, Milei plans to use the approved laws to relaunch his government and sign a national pact on July 9, Argentina's Independence Day, emphasizing principles like the inviolability of private property and reduction of public spending.
- The debate over the fiscal package was intense, with opposition arguing that the tax reforms could not be debated again within the same year. However, the ruling party insisted that the law had been approved in general, allowing for specific articles to be modified and voted on again.
- The ruling party faced internal challenges and absences but managed to secure the necessary votes for the fiscal package. Efforts included last-minute negotiations and political agreements to ensure support from key deputies.
- Milei's government also agreed to exclude certain public companies from privatization and accepted modifications to the Large Investment Incentive Regime, which helped gain additional support for the Bases Law and fiscal package.
- Despite the controversies and challenges, Milei's administration views the approval of these laws as a significant victory and a foundation for future reforms aimed at transforming Argentina's economic and political landscape.
