Javier Milei's government announced this Thursday (8) that it has decided to reduce subsidies to public transport companies to concentrate aid directly on users who need it most.
“It will have an impact on fares”, acknowledged the presidential spokesman, Manuel Adorni, in his usual daily press conference at the Executive headquarters, clarifying that “the logic is that those who need to travel can do so because they can pay the tariff or because they receive the corresponding subsidy”.
To reduce spending on subsidies – which in the last 20 years required US$104 billion and, in 2023, 1.5% of GDP -, the Ministry of Transport decided to end the fare freeze, inherited from the previous administration, on trains and buses under national jurisdiction in the Metropolitan Region of Buenos Aires and eliminate, starting this year, an Interior Compensation Fund for the rest of the country.
“The government’s intention is for the funds to be allocated directly to users, without intermediaries of any kind, thus benefiting the people who need it most, which is why social assistance will continue to be distributed, which involves 55% of the public transport fare”, according to according to a statement published by the Ministry of Economy.
The decision by the Economy department is part of the cut in public spending that the government is carrying out to achieve fiscal balance this year, starting from a fiscal deficit of 6.1% of GDP in 2023, as well as to prevent the Central Bank issue money to finance the Treasury and thus reduce inflation, which in 2023 reached 211.4% per year.
Adorni recalled that the Ministry of Economy had established a schedule of one third per year to reduce subsidies – which, in addition to those granted to transport, have also been used to reduce energy prices for the population -, but recognized that “the processes , bureaucracy and the economic situation” will define the new scheme.
Along these lines, public transport fares in Buenos Aires and its populous urban belt suffered their second increase this Tuesday so far this year, as the minimum fare for buses rose by 251% this week and that for trains, between 168% and 247%.
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