in the middle of a escalation of inflation and skyrocketing international pricesthe executive branch decided remove VAT on roast and seek deals on other commodities to mitigate the impact on the population. Faced with this scenario, for Cabildo Abierto the measures are not enough, “they fall short”, and proposes to dust off several alternatives used in governments such as that of Jorge Pacheco Areco.
In the latest edition of the weekly newspaper La Mañana, the main editorial was entitled Price controls: we did it and we can do it again. The position in favor of state supervision of prices is relevant due to the link between the morning and Open Town Hall; The weekly is directed by Hugo Manini Ríos, brother of the political leader Guido Manini Ríos, and usually collects the positions of that party.
consulted by The Observer about what was published in La Mañana, the senator and former candidate for vice president for Cabildo Abierto William Domenech He said that, although he did not debate the issue with his fellow party members, what is proposed in the weekly “is a fairly general feeling” in his community.
The legislator argued that “everything falls within the range of possibilities that the State has”. Among those options, the senator said that, for example, the State could import food and distribute it.
“The State cannot amputate any tool” and Although he specified that he is not directly proposing a price and wage freeze as President Jorge Pacheco Areco did in 1968, he did call on the economists on the government team “to study all the possibilities.”
“We (for Cabildo Abierto) think that, in such exceptional circumstances, sometimes we have to innovate. There is also the whole issue of personalized VAT. Why lower VAT on roast for everyone? There are people who have high incomes and can withstand the shock and others who cannot“, he questioned. Despite the claim, the legislator voted in favor of the measure to remove VAT from the roast in Tuesday’s session in the Senate.
Domenech recalled that his party proposed personalized VAT a few months ago and suggested that “it is not a new experience in the country either, because the Mides card somehow is a custom VAT“.
Expand measures
In today’s session of the Senate on Tuesday—dedicated to dealing with the VAT exemption for roast beef—Domenech defended the same ideas and added that “perhaps not only the roast, but also the shoulder, the needle, the minced meat, the noodles, the rice, should reach the table of our compatriots at adequate prices”.
In a similar path, yesterday, Monday, the Minister of Labor Paul Mieres also considered that the government should make a “tax affectation” to more products of the basic basketin order to prevent prices from continuing to rise, as he told The Observer.
The legislator maintained that “Uruguay cannot forget its history” and claimed the Law of Subsistence of the government of Luis Batlle Berres and the Productivity, Prices and Income Commission of Uruguay (Coprin) of the Pacheco administration.
For his part, the former lobbyist candidate Guido Manini Rios considered that “in exceptional situations exceptional measures are needed” and that in his party they have the vision that measures “fall short”.
“We believe that here we must go deeper with these measures and in that sense we are making proposals on other meat products (…). And above all a basic basket of different productsfor which no law is required, in an agreement with the large supermarkets, which at this time have to pay the State something for all the benefits that the State has given them over the years,” claimed the leader of Cabildo Abierto.
In this regard, Domenech told The Observer what “During the 15 years of the Broad Front government, the only thing that was done was to feed the concentration of economic power in large stores, supermarkets and in other fields of the economy”.
In addition, Manini argued in the Parliament session that for “twenty basic products” a “maximum price ceiling” should be set in which those surfaces have no gain”.
The editorial and Pacheco
According The morningin the post-war years “price controls on essential products ensured the access of the entire population to good and cheap products, smoothing out the effects of market volatility and limiting speculation.” In the case of Uruguay, the editorial stated that the country “embarked on its early neoliberal improvisation in the early 1960s, a process that did not end well. This forced the president Pacheco Areco, towards the end of the decade, to give a strong rudder, managing —together with his minister Charlone— to get the country out of the social and economic corkscrew in which they had left it. With that managed to put a stop to the strong loss of purchasing power that the middle class had been suffering and that fueled the discourse of sedition.”
“Our country today faces a problem that we have not suffered for many years. We are referring to the sustained increase in the price of food that the population must pay and that widely exceeds the nominal increases in wages. This will require dusting off old tools that in the past contributed to mitigating emergency situations, as was the case with wage and price controls implemented by Pacheco in ’68“, argued the weekly.
Domenech He said that, although he did not debate the issue with his fellow party members, what is proposed in the weekly “is a fairly general feeling” in his political community.
