Reactivation and reforms: Government priorities in the new legislative period

This July 20th a new legislature begins in the Congress of the Republic, the third since Gustavo Petro assumed as President of the Republic and the country’s expectations are focused on what will come in economic matters, due to the social reforms promoted by this Government, the Economic Reactivation Plan, what is known regarding the Budget and the future of some initiatives that were left for this period.

Although the second semester in the Senate and House of Representatives usually has a more economic tone than between the months of January and June, since the country’s expenses and income for the next year are defined, on this occasion there are several projects and bets that will be promoted from Casa de Nariño, which suggest that the discussion will go beyond this.

Budget 2025

The first topic that will be on the table and that should be The bill that will regulate the National Government’s income and revenue budget for next year, which promises to be much talked about this time, since its design will be crucial for the reactivation plans that the country needs, must be filed before July 30.

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The messes with the 2024 Budget, the cuts made in the middle of the year in the current periods, the drop in revenue collection and the possibility of a new cut in investment that will postpone effective actions against the slowdown; these are some of the issues that are on the table on this occasion and that both the opposition and the analysis centers and risk rating agencies will watch with suspicion.

Social reforms

Sergio Acero / THE TIME

Here, attention must also be paid to future validity and spending limitations. of investment that are planned for next year, since for the two years remaining in the government (2025-2026) $46.8 billion pesos have been allocated for this concept, of which $37.2 billion (bn) are for investment expenses ($21.1 billion in 2025 and $16.1 billion in 2026) and the remaining 9.6 billion of the terms go to operating items; which means that there is not much room for maneuver.

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Financing law

Another important debate that will take place in Congress has to do with the new proposal for changes to the tax system, which was initially said to be a ‘mini reform’, but it was recently announced that it will be presented as a financing law, which is why a new tightening of taxes for the country is expected.

Ministry of Finance – Ricardo Bonilla.

Courtesy – Ministry of Finance

“Since we have to increase the debt payment and that “It has serious implications for investment. We increase debt payments, but investment is reduced, investment is penalized. This process means finding the resources to guarantee a level of investment. We are already seriously thinking about a financing law that implies that we have to go and look for additional resources,” said Ricardo Bonilla, Minister of Finance, at the time.

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Sources from the National Government told Portafolio that one of the priorities for next year will be the search for new sources of income for the Nation, since the accounts that exist so far leave investment as the most sacrificed sector of the economy. In addition, the cash flow problems that started with the poor income projection made for 2024 must be corrected.

Ricardo Bonilla, Minister of Finance and Public Credit

Mauricio Moreno / Portfolio

Fiscal rule and indebtedness

This tax reform or financing law, according to announcements by Minister Bonilla himself, would be accompanied by another proposal that has generated noise in some sectors, while others point out that it is necessary to maintain the fiscal stability of the country; as it seeks to advance the transition of the fiscal rule to ensure its compliance.

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“We are identifying whether it can be included in the same law where the tax issues are or not, or if it has to be separate, that is a matter of unity of subject matter,” said Ricardo Bonilla, who was clear in warning that he will not ask for the limits established by this law to be raised, but he did insist that the slowdown continues to be a threat to collection and because of that, action is needed now.

Colombian pesos

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To understand this part a little better, it must be said that, according to expertsthis year there would be a fiscal deterioration of 5.6%, which the Government says is in line with compliance with the fiscal rule, and next year it will be 5.1%. The point is that for that 5.1% to be consistent with the fiscal rule, they need the help of the Congress of the Republic to advance said transition.

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Reforms and debt ceiling

The third scenario in which the Government will bet is the reforms and the project to raise the debt ceiling. Starting with the latter, it should be said that a project promoted by the Ministry of Finance has already passed the first debate, with which it is expected to increase the country’s current debt limit by US$17.6 billion. This initiative has a message of urgency and is expected to be one of the first to be evacuated as soon as the Legislative Branch resumes its work.

Colombian group investing

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Meanwhile, among the projects that will be taken to Congress, the Government has on its list a reform of public services, with which they will seek to have the Government assume the costs of the tariff option for the lowest strata, currently not permitted by law.

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“The process of both Findeter and the National Development Finance Company granting credit resources under the credit modality to the marketing companies is already underway, but what follows is the process in which we assume the debt acquired with Findeter and with the National Development Finance Company and the Government is the one that will pay it. But today we do not have the legal instrument to do so, so we have to incorporate it,” said the Ministry of Finance.

Investment in Colombia.

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Finally, there are the social reforms, a chapter that closed last semester with the approval of the pension reform and on this occasion has everything ready for the debate on the labor reform, which needs three approvals to become law of the Republic, while It is expected to be known whether the education and health issues will be presented again.
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Health reform

Like many of the Government’s reforms, one of those that will continue in the next legislative session and perhaps the most important is that of health. According to Félix León Martinez, director of the Administrator of Resources of the General Social Security System in Health (Adres), The components of this project will continue, for the most part, to be the same as those of the articulated bill that was passed in the Senate.

According to the director of Adres, for the reform project, the agreement with the EPS was accepted, where there are some modifications, but they are minor since the principles of the article are the same. For example, One of the axes is the transformation of the EPS into managers that administer the services, but do not manage the money.

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It also details the prevalence of primary care, “Because the country is behind and neglects this aspect, especially in half of the population that is not in the big cities, that does not have access to services, including medical equipment.s”, he said.

“Despite efforts to increase spending on primary care, which is about 15% to 25% of 10 points of primary care, the medium and high complexity is not reduced. It continues to increase above inflation. We take advantage of the growth of the General Participation System that belongs to the municipalities to guarantee them attention“, he explained.

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On the other hand, the director detailed elements regarding the service networks, taking into account that currently the EPS manage a very integrated network of them.The service network will be open and broader. It will not be defined only by the EPS, but together with the Territorial Government.“, he claimed.

In this way, it is expected that there will be no restrictions on the provision of services, as is currently the case, since the networks available to users would be guaranteed according to their territory.