Latin America

forest444

(5,902 posts) Thu Aug 18, 2016, 11:56 AM Aug 2016

Argentine Supreme Court strikes down President Macri's natural gas hikes nationwide

Argentina's Supreme Court today annulled the drastic natural gas hikes implemented by the Mauricio Macri administration. The justices, who voted unanimously, urged the national government to call public hearings before deciding on utility rate hikes.

The ruling, which upholds a July 18 injunction against the rate hikes issued by Federal Judge Luis Arias of La Plata, suspends the increases for residential users nationwide. A separate injunction issued by Federal Judge Martina Forns of San Martín on August 4 has suspended electricity rate hikes as well, and was likewise appealed by the Macri administration.

The courts have determined in each case that the hikes were not only “unreasonable” but illegal because they were never submitted to public comment, as the law requires for all large rate hikes.

A poll conducted by the University of Buenos Aires School of Social Sciences showed that 77% of Argentines have had to make "significant adjustments" in their household budgets to pay rate hikes ranging from 300% more for water, 600% more for electricity, and 1000% more for gas (as well as public transport fare hikes of 100%).

The rate hikes - known in Argentina as tarifazos - are part of a broader, IMF-endorsed austerity package which Macri defends as a way to trim $4 billion from the nation's budget deficit of $25 billion last year (4% of GDP).

Critics, however, point out that because the massive rate hikes also affect schools, hospitals, and many other public institutions, the net savings would be at most $1 billion - a figure dwarfed by the $10 billion in tax cuts Macri enacted for agroexporters, large corporations, and the well-to-do.

The rate hikes threatened to aggravate what is already the worst economic situation for the country since the 2002 crisis, with GDP down 3%, retail sales down 8%, and a doubling in overall inflation to 47% a year.

At: http://buenosairesherald.com/article/220128/breaking-court-voids-natural-gas-hikes-nationwide

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Argentine Supreme Court strikes down President Macri's natural gas hikes nationwide (Original Post) forest444 Aug 2016 OP

This is so unexpected. I assumed he had everything all under control already. Judi Lynn Aug 2016 #1

Macri did indeed try to pressure the court - though indirectly, by way of RW media. forest444 Aug 2016 #2

Judi Lynn

(160,516 posts)

1. This is so unexpected. I assumed he had everything all under control already.

Reply to forest444 (Original post)

Fri Aug 19, 2016, 12:18 AM

Aug 2016

We do know Colombia's Alvaro Uribe's scheming involved going after the members of their Supreme Court, hoping to find ways to bend them all to his will.

That wouldn't be unexpected in this case, would it?

Hope Macri will eventually have to eat his tax cuts for the privileged.

forest444

(5,902 posts)

2. Macri did indeed try to pressure the court - though indirectly, by way of RW media.

Reply to Judi Lynn (Reply #1)

Fri Aug 19, 2016, 01:56 PM

Aug 2016

The privatized utilities - which the Kirchners regulated but should have renationalized - did so as well by threatening plant lockouts and increased blackouts if the illegal rate hikes weren't approved.

And you're right, this is all basically a massive shift in the tax burden - from the elite, to the rest of the population.

Who pays for Macri's $10 billion utility and fare subsidy cutbacks? People in general - a back-door tax increase estimated at close to $800 a year, or nearly 6% the median full-time salary in Argentina (the wealthy pay too, of course, but the hikes barely make a dent in their incomes). And who gets the $10 billion in tax cuts? Landowners and big business, mostly - his biggest backers.

And the much-touted "deficit reduction"? Nada.

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