Guillermo Larraín, economist, academic, former president of BancoEstado and former superintendent of AFP and Securities and Insurance during the presidencies of Ricardo Lagos and Michelle Bachelet, addressed the positions of the business community regarding the reforms of the government program of President Gabriel Boric. As he pointed out on the Al Pan Pan program on El Mostrador Radio, only at certain levels of the business community “there is a feeling that it is crucial to agree on things for the country to move forward.”
In conversation with Mirna Schindler, Larraín alluded to the phrase “talk until it hurts” Issued by President Boric. For the economist, “if we talk, but we are not capable of delivering legitimate positions, we will not get very far.” Therefore, in his opinion, we must “dialogue until it hurts, but also give until it hurts.”
“The Government is giving good signals, in economic matters, adequate. There is a huge fiscal adjustment, in tax matters it has dialogued well, in social security matters there is a lot of talk. But the Government has to start showing cards, despite the fact that both have to give, both the private sector and the government, the one that has the banner of the negotiation is the Government,” said the former superintendent.
In that sense, he said, “it has to be clear what the government is willing to give and what it is not.” According to Larraín, “it would be reasonable for the government to say, in social security matters, that savings is the cornerstone of the system, since for there to be savings there must be a multiplicity of actors, where there may be a public actor, but nothing that generates monopolization” .
Meanwhile, the private sector, he added, “has to understand that the country does not understand solidarity like they do.” “It is a way of transferring resources from those who have the most, to those who are in a position of greatest weakness,” he explained.
“At certain levels of business, at least many of the businessmen with whom I talk, there is a feeling that it is crucial to agree on things for the country to move forward,” he said. Perhaps, he added to her, not everything they want is achieved, but progress can be made, “and if things have to be corrected, it is done in line with the agreements.”
Ideology and interests at stake
According to the economist Guillermo Larraín, the tax and social security issues are the most complex for the business community and the government. The tax because “there are many interests at stake” and the pension because “there is a lot of ideology at stake.”
“In tax matters, what we have to be clear about is that if one looks at the public spending series and the tax collection series, there is an upward trend of increase in systematic public spending, whose driving force is the demand for social rights “, he commented.
“This is accompanied by stagnant collection, despite the reforms that have been made,” added the academic.
Larraín stated that it is time for the business community, but also the country, to understand that it does not add up that we have public spending greater than the collection. “We need a tax reform that does it. The reform, in the short term, the Government is fine, but in the long term, the great challenge is that Chile has to change its tax structure, reduce VAT and increase the tax on rent,” he said.
And he concluded: “Income tax coverage, which is only paid by the richest 20%, must be extended to lower sectors and compensated with a drop in VAT. That will give us financing viability.”
