Commission raised 10 observations and requirements in the non-binding report of the 2022 budget proforma

After more than four hours of analysis and discussion, on the night of November 12, the Economic Regime Commission of the Assembly approved the non-binding report on the 2022 Pro-forma Budget and the 2022-2025 Four-Year Programming. The document obtained five votes to favor and four abstentions.

The motion approved by the majority of the Commission was presented by Assemblywoman Ana Herrera. The following observations and requirements were presented to the Executive:

Observations

1. Review the allocations of the health and education sectors, in order to guarantee the respective annual increases established in the Constitution of the Republic, and mainly to cover the permanent increase in demand for their services by citizens.
2. Review assignments or seek compensation to ensure that universities and polytechnic schools expand the quotas for new students whose number increases every year and who aspire to access higher education, as well as to reactivate research.
3. Specify the amounts expected to be collected for each non-financial public asset that is scheduled for sale or monetization, as well as the steps planned for that purpose and the model (s) or mechanisms defined for this purpose.
4. Specify the liabilities, their amounts and financial conditions that will be covered by the capital preservation program, as well as the origin, type and financial conditions of the resources that are expected to be obtained.
5. Clarify with the necessary technical information, the existing discrepancy between the VAT income projected by the Internal Revenue Service (SRI) and what is contemplated in the budget proforma.
6. Submit the following supplementary documents to the four-year schedule: recent evolution of sectoral expenditures; global institutional and spending four-year budget ceilings; explanation of differences with respect to the last four-year programming.

Requirements

1. Carry out the corresponding actions that allow modifying the mechanism for allocating budgetary resources to universities and polytechnic schools, so that the variations from year to year are consistent with the demand for places by new students seeking access to higher education .
2. Carry out the corresponding actions to precisely regulate the base to be used in all cases that may arise for the calculation of the annual increases in the allocations to the education and health sectors, as well as the base for the determination of the ceilings of the allocations annual defined in the Constitution.
3. Deliver the necessary information to clarify the different internal financing mechanisms that the Government plans to use for fiscal year 2022.
4. Submit the necessary information to verify the adequacy of the budget proforma, with the National Development Plan, its objectives and goals, as well as their progress, which are intended to be achieved during 2022.

The assembly members voted in favor of these 10 points: the president of the Commission, Mireya Pazmiño (PK), Johnny Terán (PSC), Ana Herrera (UNES), Blasco Luna (UNES), and Pabel Muñoz (UNES).

Instead, the legislators who abstained were: Alberto Chiriboga (BAN), Byron Maldonado (BAN), Diego Ordóñez (BAN), Eitel Zambrano (BAN). The report will be voted on in plenary, in a single debate.

The Proforma of the General State Budget (PGE) for 2022 amounts to $ 33,899.73 million. Total income is projected for $ 24,114.62 million and expenses for $ 27,898.12 million, which yields a fiscal deficit of $ 3,783.50 million, equivalent to 3.45% of gross domestic product (GDP). The financing needs are estimated at $ 9,768.85 million.

In the macroeconomic assumptions, the average price of oil was set at $ 59.20 and a production of 179.88 million barrels. In addition, the economy is expected to grow 2.8% in 2022, which represents a GDP of $ 109,618.57 million. For the year 2025, a growth scenario of 5% is proposed. Average inflation for 2022 is estimated at 1.28%.

Allocations to the health and education sectors have been subjects of contention. Some assembly members, as well as the affected institutions, maintain that resources have been reduced, in breach of the constitutional mandate. In addition, the Government would be doing wrong when calculating the allocations based on the codified budget of August 2021, when what would correspond is that it is distributed based on the codified budget of December 2020.

According to official calculations, the budgeted resources do guarantee the constitutional increase of 0.5% of GDP for health and education. In the case of health, the proforma includes $ 3,162.48 million, for education $ 4,861.18 million are projected. (I)