Argentina’s omnibus reform plan advances as Caputo expands role in infrastructure and fiscal policy

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Argentina’s government plans to roll out the Foundations and Starting Points of the Law, commonly known as the omnibus law, a flagship project of President Javier Milei’s administration. The aim is to speed up the legislative process by consolidating key reforms into a single package and moving it through Congress with urgency.

The announcement came this Friday from Economy Minister Luis Caputo at the Casa Rosada, the presidential palace, where he framed the proposal as a product of ongoing dialogue with political blocs. He said there is clear consensus on the majority of the more than 500 articles in the revised text and that the government intends to press ahead with the bill in the Chamber of Deputies. Caputo stressed that fiscal balance remains a priority and that the goal of achieving a zero deficit guides policy, even as the package progresses.

The fiscal package comprises five measures: anti-money laundering provisions, a tax moratorium, an advance on the personal property tax, higher export taxes, and changes to the formula used to update pensions.

The government argues that the additional revenue is necessary to sustain fiscal balance. It cites a drop in GDP, which worsened to a substantial deficit in 2023, as evidence that financing and investment shortfalls have driven inflation higher. Caputo noted that the government will consider supplementary revenue-raising measures to compensate for any gaps and signaled that the overall adjustment burden would be borne broadly by society, stressing that Argentines are already feeling the adjustment.

The administration warned this week about heightened regulation for provinces if governors and lawmakers perceive the measures as threatening and fail to approve the legislation. Caputo reiterated that deeper regulation would apply to all levels of government, underscoring that if revenue is not secured, spending must be reduced across the national government and the provinces alike.

The executive took this step after receiving warnings from provincial governors, industry groups, and opposition lawmakers who opposed tax increases and the pension adjustments. Although parliamentary committees endorsed the bill for review, party minority status in both chambers makes passage uncertain. Caputo said the decision was taken after listening to a range of economic actors and with the aim of accelerating the most crucial part of the law, which the government views as essential for deregulating the economy and reducing state influence.

Caputo’s Expanded Role in Infrastructure

Caputo also indicated this Friday that he would oversee areas within the infrastructure portfolio. The move follows the resignation of the former infrastructure chief, Guillermo Ferraro. Caputo briefly acknowledged the shift at a press conference but did not provide further details regarding the reasons behind Ferraro’s departure. The infrastructure portfolio had previously included major sectors such as Transport, Public Works, Mining, and Communications. Public Works has been particularly controversial, as Milei has signaled plans to minimize public projects financed by the state and to seek private capital for funding.

Caputo’s announcement came amid reports of a broader shake-up within the government. Milei’s administration has been reducing the size of the cabinet, cutting the number of ministries from twenty-one under the previous government to a much leaner structure. The changes reflect a ongoing effort to streamline governance and reallocate resources away from large, state-led programs.

According to late Thursday reports, Milei several times pressed Ferraro to step away from the government in the wake of allegations about leaks from cabinet meetings. Some sources suggested a strained relationship between Ferraro and key aides, including Nicolás Posse, the chief of staff and a close confidant of Milei, and Karina Milei, the secretary general of the Presidency. The official rationale cited concerns over the accuracy and handling of sensitive information, though alternative accounts pointed to broader governance tensions within the administration.

In the current setup, the infrastructure portfolio is linked to several major areas, including Transport, Public Works, Mining, and Communications. Public Works has drawn attention for its cost implications and Milei’s stated preference for private funding, which could reshape how large projects are financed and managed in the near term.

The broader political backdrop continues to unfold as the Milei government presses for its prioritized reforms, balances fiscal discipline with growth objectives, and navigates the expectations of governors, lawmakers, and economic actors across the country. As the administration maneuvers through the legislative process and leadership changes, observers will be watching closely for the impact on policy coherence, investment sentiment, and the pace of structural reforms in Argentina.

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