For the second time, the current Government extends the National Budget, which will allow it to manage the accounts for 2025 – a year in which the President announced that there will be “deep chainsaw”– with the same discretion with which he handled the 2024 one.
It means that the Government will manage the Budget using the DNU (Decrees of Necessity and Urgency) and Administrative Decisions of the Head of Government, evading the National Congress. .
“It is an unprecedented measure to extend the validity of the budget for 2 years”he told Clarion the tributary Marcelo Rodriguez. “It is not an ideal measure given the importance of the Budget in order to properly align the application of State resources,” he added.
For ASAP (Argentine Budget Association) this extension “constitutes a setback in the institutionality of the National Public Sectorly reflects the impossibility of reaching the minimum agreements necessary to have the most important standard for the annual management of government.”
ASAP points out that “this setback is not limited to a question of forms, since it also has implications in various orders, given that the Budget, apart from being the annual financial expression of public policies, and as such includes the maximum spending authorizations and the calculation of the resources to serve them, also contemplates the performance levels in physical terms.defines the financial result goal, authorizes the issuance of new public debt, includes the infrastructure works plan, It contemplates provisions that affect different economic actors in the private sector, establishes the financial resources that the provinces, municipalities and public companies will receive as transfers, contains guidelines for the evolution of public salaries and retirements and pensions, incorporates definitions of the public employment policy and contemplates functional aspects of the National State, among other issues”
The Financial Administration Law establishes that “If at the beginning of the financial year the General Budget is not approved, the one that was in force the previous year governs”enabling the interpretation that it can be used whenever there is no legislative approval of the budget” states a Report from ACIJ (Civil Association for Equality and Justice). However, he questions the recurrent use of an exception mechanism.
It is also admitted that the Executive was postponing the parliamentary treatment of the 2025 project to have your “hands free” again to manage the Budget.
Nadin Argañaraz, from the IARAF (Argentine Institute of Fiscal Analysis) says that “the budget is usually considered the law of laws, from which we deduce its importance as a legal guide for the allocation of tax resources during a given period.” And He added: “to the extent that there is nominal income growth due to the functioning of the economy, the surplus resources must be allocated. If instead of a new Budget, there is an extension of the old one, that allocation must be made by the executive branch by decree”.
Meanwhile, for the specialist Fernando López Chiesa “the government extended the 2023 Budget to the year 2025 and instructed that the same resources, financing and expenses be taken. Minister Franco is instructed to adjust the numbers based on exchange rate and inflation patternsa task that will take time to adapt the State’s financial activity. At the same time, the Country tax was eliminated so that source of resources will no longer be available. Also some provinces did not approve the provincial budget and it will be unknown how they will manage to meet the 2025 expenses.”
For Marcelo Rodríguez “in the current economic and political situation, I understand that The conditions were not in place to make the provincial needs for funds compatible with the will of the Executive Branch to maintain the zero deficit.. We will see how this decision can be made compatible with the government’s will to eliminate 90% of taxes.”
Argañaraz admits “that for the current government It is essential to control the fiscal anchor and the conviction that the credibility In relation to maintaining the fiscal balance, it rests on the Executive Branch. That is why there was no deliberate action for the Budget to be addressed. “I don’t see the point in the discussion regarding whether there is little or much discretion, given the low or high inflation that may occur in the period where the extended budget is going to govern the destination of the resources.”
For ACIJ, without counting the current extension, this mechanism “became recurring so that in the last five years, it happened three times. This has allowed governments, on certain occasions, to manage fiscal policies without the need to seek political consensus in Congress, as occurred in 2020 and 2024, years in which the budget was not discussed among legislators and instead resorted to to the extension of the current Budget for the previous year. On other occasions, the budget extension was preceded by legislative debates that ended up rejecting the proposal sent by the government, causing the previous one (extension) to come into force, as happened in 2022. Additionally, the budget modifications were mostly implemented through a combination of DNU and Administrative Decisions, leaving Congress in a secondary role.”