Days past, the Budget Commission integrated with the Treasury of the Chamber of Senators received the government economic team, within the framework of the analysis of the Accountability that has already been approved in Deputies.
During the session, Senator Bergara recognized that, without a doubt, there has been a “very important” growth in exports of goods and services, especially those of goods, associated with very high international prices. I note that it has been called a “tail hurricane” and has been associated with a high demand for the main items that the country exports.
The legislator noted that, however, such data “contrasts with the much more depressed behavior of domestic demand, of the consumption of Uruguayan families that are far from having that dynamism that exports had”.
Bergara said that “there is a dual axis in which exports grow, especially based on the conditions of international markets, and domestic consumption is depressed due to the fall in real wages and liabilities, and the increase in some significant items, such as fuel, or taxes”.
“We have been discussing for two years that it cannot be said that there was no increase in taxes, when VAT was increased on electronic purchases, there were changes in the parameters linked to personal income tax and the IASS”, remarked the MP from the Front.
He added that, likewise, there is an evolution of investment that is highly conditioned by the development of works linked to the projects of UPM 2 and the Central Railway, which presents the enormous challenge of sustaining those levels of investment once these works are completed.
“The Government proposes a fiscal improvement as something positive and for celebration, but obviously we are going to disagree and qualify that tone because our analysis indicates that in these years the ‘fiscal improvement’ (said in quotation marks) is explained almost entirely by the fall in salaries and liabilities, and by the increase in the tax burden”he remarked,
Bergara said -according to the stenographic version of the meeting-, that salaries and liabilities have implied lower spending in these years, of around 700,000,000 dollars and the increase in tax collection amounted to just over 100 :000,000 dollars, which mainly explains the change in the fiscal result.
“We do not see that the ‘fiscal improvement’ is due, effectively, to increased efficiency, to cutting fat, to improving productivity in the public sector or to the incorporation of technology, but rather, plain and simple, to the salary cut and passivities and the increase in taxes”, said.
Bergara questioned that “there is no comprehensive agenda linked to economic growth with a long-beam perspective, there is no agenda linked to economic and social development, there is no powerful agenda for competitiveness, nor for productivity”.
Regarding salary evolution, at the end of the period, according to the government’s own figures, “we are going to have a 9% larger cake, but the participation of the Uruguayan salary mass is going to be smaller.”
“This occurs in a clear distributive logic in the regressive sense, where we must recognize the sincerity of the government in saying that it is necessary to release the action of the gold mesh, who are being benefited. There was talk of billions of dollars of increased bank deposits both in Uruguay and abroad, associated with the highest accounts, with the clear absence of the famous spill that, in reality, has not been seen operating in the world in any moment in history,” he questioned.
Inflation
With regard to inflation issues, Bergara said that the government has recognized, albeit two and a half years late, that lowering inflation is not as easy as making a correction.
“That we now have inflation goals that are 2% above what was proposed, is an act of humility and speaks of accepting that things were not so easy, it was not blowing and making bottles or lowering inflation when you wanted, even, in times when economic growth was not so dynamic”, he told the Economy authorities.
Bergara stated that the explanation given by the president of the Central Bank of Uruguay, Diego Labat, regarding how the monetary policy acted implies assuming that inflation was not the only objective in the management of his institution, but to sustain the level of activity in depressive moments.
The FA legislator added that the economic situation is perceived by the population in an increasingly negative way.
In this sense, he cited that the latest surveys show that the majority of the population perceives that the economic situation is “bad” or “very bad.”
“There is a good part that says that it has not changed and a smaller part that maintains that it has improved but, obviously, that depends on many factors, some that are in the orbit of the government and others that are not. In any case, as many times we were told that economic policy positions or government policies were validated based on citizen perception, now we must assume that citizen perception has changed and, therefore, the government should consider the possibility of revising this orientation”, declared Bergara.
