SANTIAGO — President Sebastián Piñera said that next year’s national budget is 9.5 percent higher than 2020’s. According to the president, the main focus will be on reactivating the economy. This year, 1.8 million jobs have been lost; Piñera said US$2 billion of the budget will be directed to address the issue.
Chile is going through an economic crisis provoked by the one-two punch of the 2019 social outburst and the coronavirus pandemic. At a press conference on Sept. 29, President Sebastián Piñera announced the national budget for 2021. He said that it is “the budget of work and economic recovery.”
The total amount for 2021 is US$73 billion. “A very austere budget,” according to Piñera. With it, the government hopes to reverse the deficit on this year’s economic growth, which is -5.8 percent, and transform it into a growth of 4.6 percent by 2021.
According to the National Institute of Statistics, the pandemic has left over 1.8 million people without a job. The Minister of Finance, Ignacio Briones, told news outlet Cooperativa that the government’s priority “number one, two, three, four, and five, should be to recover” the lost jobs.
President Piñera said that over US$2 billion of the budget will be directed to employment. “This is equivalent to an increase of 416.4 percent, compared with the 2020 Budget Law.”
Major Categories For Deployment
In the health sector, the president announced an increase of 8.9 percent, compared with the 2020 budget. US$1 billion will be directed to health to “continue combating the coronavirus pandemic, and to acquire, in a timely manner, safe and effective vaccines” to protect against Covid-19. Piñera also announced the creation of 54 hospitals and 120 clinics.
Another relevant focus of next year’s budget is the reactivation of the economy. The area denominated “Economic Recovery” has a budget of US$11.5 million, deployed through 11 ministries.
“Social Protection,” which includes resources to protect the elderly, children, and women, has a budget of over US$30.5 million. The increase in programs for the elderly, compared with the 2020 budget, is 7.2 percent. As for women, “the budget increases resources by 36 percent, to strengthen the protection of women who suffer violence.”
To explain how, amid the economic crisis, the national budget is being increased, Piñera said that the government evaluated over 700 programs and “managed to reduce expenses [of public servants] that were avoidable, such as travel allowances, trips, cars, and unnecessary consumption.”
Awaiting Congressional Approval
The Budget Law follows a different process from other laws. It passes through five committees, made up of senators and representatives, who analyze in detail the numbers proposed by the government. Ministers and advisers also participate, as they have to explain the bill to the congresspersons.
Once all the committees dispatch the items they reviewed, a new committee is formed. Known as the “Mixed Budget Committee,” its function is to analyze the content of the law and the change in the numbers compared to previous years.
After the Mixed Budget Committee approves the budget, the budget is voted on by both houses of Congress. After they approve it, the president signs it into law.
At this time, Congress now has 60 days to process the budget bill, and if a law is not approved within those 60 days, Article 67 of the constitution establishes that the “the bill presented by the President of the Republic will govern.”