The National Government is determined to carry out profound reforms, with which it seeks to pay off a debt it has with the people on three important fronts: health, labor and pensions. These initiatives have already been presented to the Congress of the Republic and The debate on at least one of these, that of health, has already begun in the Legislature, despite the strong criticism it has received for its intended scope.
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The labor, which is about to start its discussions and the pension, whose presentation for the first debate is pending, have not had any different luck, since criticism from different sectors has not been long in coming. But aside from this,How strong can be the impact for the finances of the State of this initiative? The figures from the Government and the analysts are in very separate corners, which has helped to sharpen the controversy over the future impact of these, before which they have asked to review and adjust key issues of said projects.
Academics, study centers, analysts and trade unions have been insisting on the urgency of finding consensus on fundamental aspects so that these costs not only do not affect companies and reduce the burden on the State, but also do not directly or indirectly impact to the Colombians. These are the key points of that discussion.
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Health accounts
Although from the beginning the Government has said that the cost of the health reform will be around 6 trillion pesos in 2024, some experts point out that this calculation would fall short once the implementation of what is approved in the Congress of the Republic that is already discussing the initiative presented.
In the preliminary accounts of the Ministry of Finance, it is noted that This fiscal cost of the health reform will have a progressive increase year after year, with direct expenses of close to 8.2 trillion pesos in 2025, and after 10 years these will be about 13 billion.
Mauricio Santa María, president of the Anif economic studies center, has repeatedly said that calculating the cost of this reform is quite complicated, but he warned that it could be equivalent to about four tax reforms.
He is not the only one who foresees that this initiative will have a huge impact on public finances. On a recent occasion, the Autonomous Committee of the Fiscal Rule (CARF) pointed out that this initiative will imply additional fiscal efforts of between 4 and 7 trillion pesos, according to figures published by the Government.
It also identified five risks associated with the project that could raise its fiscal cost, including primary care, the proposed supply scheme generates a loss of capacity to limit the cost of health services due to lack of alignment. of incentives among those who provide the service and pay for it, insufficient capacity for resource management in the regions, lack of capacity for risk management inherent to the provision of the service
service that the Nation will assume and prior and full compensation for lawsuits alleging deprivation of exercise of legitimate activity.
The country’s businessmen, through Andi, have also warned about these higher costs of approving the project as it was presented. «This reform, which changes the service model, is also demanding in terms of capital, required to increase the public offer at all levels, design, build, contract and operate a great information system, formalize and improve the conditions for remuneration of talent health, support a very robust paid governance structure and strengthen and create new entities,» said the union in an analysis released.
It also specifies that the «new model can lead to an increase in the cost of prepaid medicines and, in general, to an increase in private spending on health by Colombians.»
labor impact
Apart from the shot in the payroll costs of the companies that the country’s businessmen have announced, they also insist that this project will have a high weight in the state’s finances, something that the Government has dismissed. Gloria Inés Ramírez, Minister of Labor, has insisted that The only cost that said reform would have would be the extension to 12 weeks of paternity leave progressively until 2026, if the initiative is approved without modifications.
In the ministry’s accounts, this cost would be close to 500,000 million pesos or, according to what the official said, 0.091 percent of the Gross Domestic Product (GDP).
Even the new Finance Minister, Ricardo Bonilla, has defended this impact
of paternity leave. “The labor reform has no fiscal cost, unless paternity leave is taken into account because it would include all public and private workers. That would be the only cost that it would have in fiscal terms”, he said.
But the private sector thinks very differently, including the Banco de la República, which in a study by a group of analysts from the entity warns of the possible loss of 450,000 formal jobs in an average scenario in a horizon of between 3 and 4 years.
There are elements of the reform that can be positive, but It is important that society and Congress are aware that these decisions are not free and that there is a significant risk that this sharp increase in labor costs, and in particular of some sectors that depend on night work, affect hiring and reduce employment,” Villar said in a summons to Congress.
Luis Fernando Mejía, director of the center for economic studies Fedesarrollo agrees with that position. It points out that the proposal by the Government is focused on granting greater remuneration and protection to current formal employees, and although this is a laudable objective, in a labor market with high rates of unemployment and informality, it is likely that these measures will have as a consequence an increase in the incidence of informal employment, a disincentive to job creation and an incentive to automation.
For Credicorp Capital analysts, the proposal raises concerns about the potential additional hiring costs for companies, which could have a not insignificant impact on job creation and informality in the future. And note that the reform does not directly address labor informality, labor productivity or the need to promote job creation.
The pension coup
Although the presentation of the pension reform is not yet known, this is one of the initiatives that has generated the most controversy in various sectors, since it is considered that its impact on public finances in the future will be enormous, something that the government has also denied.
In fact, José Antonio Ocampo, former Minister of Finance and who was in charge of drafting the text of this reform, before his departure from government, insisted that the calculations of several analysts were wrong, since those of the finance portfolio They indicated that with the project presented, if approved, the net present value of the deficits in 2070 could be reduced from 67.5 percent (in a scenario without reform), to 55.2 percent of the gross domestic product (GDP). .
Some calculations that are far from reality, according to Asofondos, Anif, Fedesarrollo and CARF, who presented their own accounts.
The estimated fiscal impact from Fedesarrollo for the pension reform, in the central scenario, is an increase of 30.2 points of GDP in the liabilities of the old age protection system, with 12.5 points for the solidarity pillar; 8.4 points for the semi-contributory and 9.3 points for the contributory.
In Anif, for their part, they warned that the high pension liability, which today is around 110 percent of GDP, would more than double and would come to represent up to 249 percent of GDP ”, with calculations to 2070.
For its part, the CARf in its recent analysis detected that, without the reform, the net present value (NPV) of the net flows of the Government to Colpensiones by the contributory pillar, at 2100, would amount to -132.5 percent of GDP and with the project
filed law would reach -160.5 percent. But by making the adjustments to the project that said Committee recommends, many of which coincide with others made by businessmen and unions such as Asofondos, that present value could be corrected to -151.6 percent of GDP.
Asofondos, a union of private pension funds (AFP), also responded to the criticism made by the Ministry of Finance for the impact of the pension reform, since according to the accounts of some unions and experts this would raise the pension liability a 224 percent as a proportion of GDP.
Daniel Wills, the union’s technical vice president, defended the union’s calculations, saying they were convinced the figures were correct. He pointed out that the Government says that the solidarity pillar cannot be included, but it is a bill that must be paid and that is why they include it, something the government does not agree with. «The same happens with the semi-contributory that we also took into account because we believe that it is part of the cost of the law,» says the analyst.
In his mother, he said that it is difficult to understand that the pension liability goes down in the future, as the Government proposes, especially considering that the vast majority of people are going to go to Colpensiones and this offers them a greater benefit than they could cover the money that is going to be spent from private funds (AFP), so that gap will have to be covered.
«When one is multiplied by the number of people who will move, that yields a very important figure, that is where our calculations start from and that is how they are built.
We are trying to understand the government figures,» Wills insists.
*EL TIEMPO being part of a conglomerate of companies to which an AFP belongs.