The cash squeeze that the Nation experienced during 2024 and which remains a fiscal risk for 2025, led the Government to cut spending and for the coming period it had to change one of its most important tools in the fight against poverty and inequality: subsidies.
Gustavo Bolívar, director of Social Prosperity, spoke with Portafolio and explained that initially it is a postponement of resources, waiting for the country’s cash flow to improve, since otherwise they will have to be definitively cut by 2025.
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Why did the cut occur?
Due to the fiscal adjustment that affected all entities, derived in turn from the fall in the Constitutional Court of a large part of the tax reform, the non-approval of the financing law in Congress, the non-discussion of the congressional budget and also the high debt that the country has had in these four years, since President Gustavo Petro was forced to make some adjustments, some cuts already for 2024.
In this case we are talking about the postponement of $12 billion (at a general level) that is not financed and within these cuts, the entities have to make an effort and bet and it has been up to me, since the freeze and the cut last year, five billion.
How did it affect DPS?
I had $10.7 billion and now I will only have $5.3 billion by 2030. Mandatory, with half the budget, well I have to look at what lines of subsidies I prioritize and the two that are immovable for the President are the adult higher, which is even increased with the entry into force of the pension reform law, the base is increased from 1.7 million old men and women to 3.1 million and the pension bonus of $80,000 to $225,000, that is a priority for the government, because an old man can no longer work.
Gustavo Bolívar – DPS.
Courtesy – API
Children are also a priority and so the citizen income subsidy for women heads of household with children under 6 years of age is also maintained, but the rest of us do have to use scissors, cut and modify, but above all, and that is already I had been speaking since I took office in March of this year, we have to transform the transfers of people who are of working age into productive projects, they have to produce their own income through cooperatives and their own efforts.
What will change in each program?
In some cases, the program for women heads of household with children under 6 years of age alone does not cost $2.1 billion, and the program for the elderly without the pension reform coming into force costs us $1.5 billion. If you look between those two we only have $3.6 billion and I also have to pay VAT, the point around VAT that is by law, that is not negotiable, it also costs us $1.2 billion, that’s almost gone. all 5 billion, so where do I pay the rest?
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Is there no way to avoid clipping?
People have to see that it is not a whim, it is not that we want to come and scissor things for the sake of passing things to them, but it is simply an exercise in prioritization and for us children and the elderly are priorities.
For the rest, we are making it easier for them through loans and through organization and interest rate subsidies to start working and generating their income.
Subsidies
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What will happen to Young Income?
The financing is almost half a billion pesos that we need to finance this program and I do not lose hope that we can have good news for Colombians, because it is not as they are saying, that we came to cut subsidies to the people.
The Renta Joven program is not dead, we are looking for financing by all means and we know how important it is. What’s more, I have been a staunch defender, not only this end of the year, but today we are here, about to end the year and we continue working.
What is the productive project strategy like?
Currently there is a perversity and this had already been announced before we knew about the cuts, and we discovered, when we arrived at Social Prosperity, that people refuse to get out of poverty for fear of losing the subsidy.
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People don’t even want to put a floor on their house because that means restructuring their Sisben and suddenly they go to a level where they no longer receive a subsidy, so they want to live without the asphalt floor all their lives because the subsidy condemned them perpetually. to poverty.
So, we are telling you, no sir, you have to put a floor in the house, you have to decorate your house, you have to make it beautiful and we are going to help you do it through your own work and for that we are going to help you. to facilitate targeting with other people in your town so that they can organize and start working.
Under what modality?
Whether through peasant associations that want to rent land and grow something or if they already have the land to lend them the money for the seeds, for etc., the inputs, whether they are artisans, whatever, whatever line they choose, we We are going to make an agreement that I just made with the National Guarantee Fund to support those loans that people seek.
Will the eliminated subsidies return?
Yes, that is why I talk about postponement, because if it were a cut at once, well, we no longer went with the $511 billion and bye, no, since it is $523 billion and we are postponing part of it, $12 billion, it is with the expectation that or collection improves or some supervening event appears in the economy, such as there being a disproportionate rise in oil.
Colombian pesos
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In that case there would no longer be a postponement, but we would incorporate them into the budget and if those supervening events do not definitively appear after a few months, then obviously the cut would come.
A social government ending subsidies?
If we go to the philosophical background of the subsidy, the subsidy is more neoliberal, because what it does is individualize people, but what we are saying is that we are going to associate them, as Germany did, to bet on the solidarity economy, to tell you something , with these $50,000 million that we give to the National Guarantee Fund, they guarantee placement of 400 billion in credits.
So, one can have the person tied there, because those subsidies were really set up by neoliberal governments. One can have them tied to a subsidy there, even electorally enslaved, because that has an electoral cost, or one can tell them, come on, no, we are going to work, we are going to associate, you do not be afraid to get out of poverty and we are going to advance.
That would be prosperity, but I am an entity that calls social prosperity and what it does is perpetuate people in poverty. So, What I found there, if we go to the philosophical part, is that this premise is not fulfilled.
