Two months after the congress’s dispatch of the withdrawal of planned funds to deal with the pandemic, La Moneda risks a repeat of history, after yesterday in the Constitution Committee of the Chamber of Deputies the initial kick-off was given to the discussion of the draft constitutional reform that seeks a second withdrawal of its savings.
In its preliminary reactions, the Government has implemented the same strategy as with the previous project, opposing the initiative. The Minister of Labour, María José Zaldívar, presented yesterday to the parliamentary body insisting that a second withdrawal will have a severe effect on future pensions, in addition it will cover a dimensioned universe of members and also generate tax benefits for the highest-income people, basically the same arguments of the discussion of the first project.
According to Zaldívar, the project «is absolutely at odds with what is being addressed, which is to strengthen the pension system, and would create serious problems that I believe are not being analyzed in a harmonious and comprehensive way».
The government position was reinforced today by Economy Minister Lucas Palacios, who argued that «it is not a good idea to keep taking money out of people’s pensions.» Above all, considering that the ones most affected «are the poor, who are running out of resources.»
Following the presentation of the results of the pilot plan for the return of the construction sector to its jobs, led by that portfolio together with the Chilean Chamber of Construction (CChC), Palacios, while acknowledging the first 10% withdrawal generated a significant injection of liquidity, «which helped in the short term», he also said that this was done «at the expense of Chileans , leaving 1.8 million people with zero pesos in their savings accounts.»
The economy holder reiterated his idea that the Government has been taking a number of steps to mitigate the greatest impact of Covid-19, even though parliamentarians – even officialism – point out that the Executive’s response remains slow and that is why such legislative motions arising from the Congress itself are justified.
«We have put in place a number of measures to inject liquidity and improve household incomes. We have also implemented tools to strengthen the development of the economy,» said Palacios, who also insisted that this eventual second retirement is not a good idea if it is considered that «according to expectations, the performance (of the economy) has been less bad and that projections towards the end of the year are improving.»
According to government data, to date, 9,148,000 people have already withdrawn planned funds, and of this total, 20% have already withdrawn all of their funds. In addition, «65% of these 9 million members withdrew but all of their resources, well over 10% of their funds,» the minister said yesterday.
The AFP guild estimated that a second withdrawal would result in the number of affiliates being left without balance in individual accounts could increase from 2.8 million to 3.9 million people, Pulse reported.
Deja vu in Chile Vamos
The Government also faces déja vu with the parliamentarians of its own coalition, which the previous time tilted the scales in favour of retirement. In defending the project, The Deputy of the Humanist Party, Pamela Jiles, said yesterday that the initiative «does have a political floor, because I have the explicit commitment of more than 14 Members on the right» to approve it in court.
In fact, at least three RN deputies have already made themselves available: Eduardo Durán, Camilo Morán and Diego Schalper. Of these, the most striking case is the latter, because it was one of the toughest voices in officialism to oppose the withdrawal of 10% of AFP funds.
But now Schalper showed a new facet: «Regarding this second withdrawal I declare myself open to evaluating it,» he said this afternoon in Congress. The MP for O’Higgins justified his position, noting that in the previous vote «all the information we received tended to say that there is going to be a tremendous downhill here.» And that didn’t happen, he admitted.
In his view, this second withdrawal could open room for «wider» dialogue while advancing the adoption of planned reform and other issues related to pensioners. «If we make a broader framework agreement, I think Chile is the one that finally wins,» he said.