BOGOTA (Reuters) – Colombia’s government on Friday presented a law to the country’s Congress to raise public spending in its budget this year by 25.4 trillion pesos ($5.11 billion) in a move to finance the social plans put forward by President Gustavo Petro.
Most of the resources to hike public spending will come from a tax reform approved by Congress last year, which came into affect in January, as well as those obtained from public companies.
The bill would add 8.6 trillion pesos ($1.73 billion) to this year’s budget, bringing the budget total to 414.2 trillion pesos ($83.4 billion).
Lawmakers originally approved a budget worth 405.6 trillion pesos.
To increase public spending Colombia’s government will reduce fuel subsidy payments, which will now flow directly from dividends paid by majority state-owned oil company Ecopetrol.
The extra money will go towards purchasing land for agrarian reform, constructing tertiary roads, payments to Colombia’s poor, as well as to strengthen the health sector budget, among others, the government said.
“It’s an economic reactivation strategy that takes advantage of biodiversity, respects and guarantees human rights, empowers the popular economy, improves social protection networks for the poor and vulnerable, and that contributes to building resilience in the face of shocks without jeopardizing energy sovereignty,” the bill said.
Petro, Colombia’s first leftist president, enjoys a solid coalition in Congress with parties from across the entire political spectrum which approved last year’s tax reform and which will be key to passing the political, economic and social reforms with which he wants to fight poverty and exclusion.
In addition to the health reform, the government hopes to soon present labor and pensions reforms.
($1 = 4,966.33 Colombian pesos)
(Reporting by Nelson Bocanegra and Carlos Vargas; Writing by Oliver Griffin; Editing by Chris Reese)
