Thanks to these cuts, Argentinians will save more than 2 billion dollars per year
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In the context of the necessary adjustment in the public sector, the Government of Javier Milei reported that during the first 18 months of administration, it reduced the number of public sector jobs by 50,591, thus achieving an annual saving of 2 billion dollars.
“The chainsaw continues. Let's remember that every peso the State saves is one less peso in taxes that we citizens pay. We're already at an annual saving of USD 2 billion. That's why the chainsaw is so popular”, stated the Minister of Deregulation and State Transformation, Federico Sturzenegger.
In December 2023, before the start of the libertarian government, the Public Administration had 205,550 employees, while state-owned companies had 91,166 workers. By April (latest available data), those figures had dropped to 177,444 and 76,230, respectively.
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Regarding the 2 billion dollar saving, the government explained in a previous report: “It is widely agreed that the total cost of each employee doubles their salary due to expenses in work infrastructure, such as office space, furniture, electronic equipment, supplies, and various services”.
Additionally, recently Federico Sturzenegger commented on the matter, stating: “So far, we've cut 50,000 public sector employees, and that hasn't resulted in a decline in services. Many were "ñoquis" or people doing things that society didn't value”.
As an example of unnecessary spending, it was mentioned that INTA had 3,000 vehicles for its 6,000 employees and a budget of 400 billion pesos (881 million dollars), while Senasa had 700 pickup trucks. “There are areas that have more secretaries than several ministries. These are things that were done to create positions and generate funds”, the minister pointed out.
Javier Milei, presidente de Argentina.
The significant reduction in staff, which includes layoffs and non-renewal of contracts both in the National Public Administration (APN) and in state-owned companies, pursues a clear objective: to reduce public spending and consolidate the fiscal surplus.
In general terms, the surplus target set by Milei's Government for this year is more demanding than the one established in the agreement with the International Monetary Fund (IMF), so it is expected that the quarterly targets will reflect this reduction in spending throughout the fiscal year.
This decision responds to the fact that, on the same day the agreement with the IMF was formalized, the economic team considered that the target set in the program, a primary surplus of 1.3% of GDP, equivalent to about 6.3 trillion pesos (13.9 billion dollars), was not enough to guarantee macroeconomic stability in the face of possible external shocks. For this reason, it was raised to 1.6% of GDP, which represents around 7.7 trillion pesos (17 billion dollars).
