The measures taken by the Government for workers who have been affected by their economic livelihoods due to the Covid-19 pandemic, especially independent and fee-stopping doubts. To the criticisms of the opposition, the anger of the “boleteros” with the insurance solution proposed by the Government and the questions of entrepreneurs, now add the questions of an expert as the former president of the Central Bank and current dean of the Faculty of Economics and Business of the University of Chile, José de Gregorio.
While he appreciated, in an interview with the newspaper La Tercera, the measures in general, he stated that the effort should be greater. “It seems to me that the Government has gone in the right direction, but the help of families and the programme to workers is insufficient in its magnitude, a greater effort could be made to cover more people, because this reaches 60%, but what if it is at 65%, 70% or even 80% that can also be having a hard time.” “You have to expand the coverage, but at the same time the amount. Try to reach a minimum wage for households. The government announced that it was going to allocate $2 billion, which is why I think it should now have used the entire fund, not just a portion of them. The urgency of the measures to be implemented does not seem to be taken weight,” he added.
The Government’s explanation for putting that cap on is that they are saving more money in case the pandemic extends over time. But for De Gregorio this is not so, since “now we are in the peak, then other policies can come. We are living in a time where the main actor to get out of the crisis is fiscal policy. There is no other option, we will end up with a heavier backpack, but a good exit will allow us to recover better and reasonably handle this tax backpack that we have.”
In particular, he criticized self-employed insurance: “It is a self-insurance system because it is a savings. I have not reviewed the detail, however, safe in this area are difficult to design. It is a complex discussion, which adds to the quote of independents who will see their savings income reduced in a relevant way. It does not respond to the urgency or magnitude that the crisis requires.”
“There is no more tax rule at this time. The State has no unlimited space, it is always limited, but there is still space. Chile is one of the emerging countries best placed to do the right thing and then see financing. Many do it unfortunately the other way around, you do what you reach. Chile, on the other hand, is different, because for decades of macroeconomic seriousness, there can now be another demonstration that was not 30 years lost. The important thing about support programs is to be able to withdraw them on time, they are short-term. The big problem that emerging economies have had is that when a recession comes, fiscal policy expands and then fails, and the stimulus that is transient begins to stay permanently. There’s fiscal inertia. The important thing is that the stimulus is for once and allow a reasonable fiscal deficit to be restored,” he explained.
They don’t give the numbers
Also from the world of entrepreneurship, the Government project arouses doubts. For the president of the Multigremial of Entrepreneurs, Juan Pablo Swett, the numbers simply don’t fit: “Effectively 2 billion were announced that included people with fee tickets, informal self-employed workers and also a share for independent employers.”
However, he asked, “if you consider the $300 million to be put in the General Treasury of the Republic, if you estimate that you will be given 250 thousand pesos per month for three months, that reaches 350 thousand people, and we have 1,800,000 independents who are balloted.”
“The number is yet to be seen, but $300 million is enough for 20% of the people President Piñera announced,” Chile warned on CNN.
Disappointment and concern between fees
In the meantime, the fee workers, grouped in the Federation National Union of Workers and Workers at State Honors, also expressed their disappointment and concern regarding the solution delivered by the Government.
They point out that this project, “the latest in the government’s economic package – supposedly aimed at protecting workers and employment, demonstrates once again the technocratic nature and away from the real interests and needs of workers, especially those of whom we work at honors in the State.”
Among the shortcomings, they stress that insurance will only be activated in situations of calamities, natural disasters, economic or health crises, which must be established by the authority, and not in the case of redundancies, for example; It also lays down certain eligibility requirements, which are not entirely clear; has a maximum ceiling of $500,000, i.e. “under no circumstances will the insurance payment be 100% of gross income; nor does it protect for the entire duration of the catastrophic event.
In addition, another point that raises doubts is that it is not clear which insurer will be in charge of managing these funds, whether it is the AFC or an AFP.
Hence they call upon parliamentarians to legislate fairly and reject this immedial, shallow and mercantilist measure that is far from a protective action by the state for more than 1 million workers/ and particularly about 370 thousand in the State.”
