SANTIAGO, 04/19/2022 (AFP) The Chilean Chamber of Deputies on Monday rejected two conflicting bills for a new early withdrawal of pension funds: one by lawmakers and one by the government, which wanted to limit the use of funds.
After eight hours of debate, the chamber rejected the general plan, also supported by the rightwing opposition, to withdraw funds presented by leftwing MPs by 70 votes in favor, 70 against and 12 abstentions as was approved three times the withdrawal of up to 10% of the Funds from the pension fund administrators, known in the country by the acronym AFP.
The bill, which is now on hold and only a year from now before Congress, has been criticized by the government for raising the country’s already high inflation, which stands at 9.4%, by up to five points in the last 12 months, which can reach up to 15%.
“The damage this would have done to citizens would have been far greater than any oneoff benefit it could have brought to certain people,” Finance Minister Mario Marcel said after the vote.
Parliamentarians have already presented other projects to process new initiatives to take 10% of pension funds.
Shortly thereafter, the Chamber of Deputies also rejected, by 68 votes in favour, 83 against and one abstention, the project put forward by the government allowing for a “smaller” deduction of funds, which wanted to limit the use of deductions to pay off debt .and the acquisition of their first home.
Because this is a project of executive origin, the government of Chilean President Gabriel Boric can insist on processing the initiative in the Senate.
If either project had been approved, this would be the fourth early withdrawal of funds, following the approvals in July and December 2020 and April 2021.
At the worst of the pandemic and with no government help, the first withdrawal from pension funds gave about 11 million people access to resources, while the second considered 9 million citizens and the third 8 million citizens. The sum of the three withdrawals represented an injection of $50.6 billion into the Chilean economy.
The vote in the Chamber of Deputies was the first challenge in the legislature for President Boric just over a month after his inauguration.
The Congress that emerged from December’s elections has equal parity in both chambers, meaning working on projects requires agreements between parliamentarians from across the political landscape.
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