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October 3, 2016

President Bachelet submits the proposed 2017 budget

► Speaking on national television, the President announced that “the wellbeing, dignity and security of Chilean families" would be at the heart of the 2017 budget. That is why expenditures on education, healthcare and public security will be prioritized. Together, these areas represent more than 8 out of every 10 pesos in the budget increase."

► President Bachelet also announced a “10% increase in basic pension and solidarity pension amounts. I will submit a bill that makes the increase effective as of January 1st."

Complete Presidential Speech

“My fellow Chileans:

I want to present to you the 2017 budget proposal that I will be submitting for congressional approval.

We have set forth, in an entirely transparent manner, how public funds will be used to meet our citizens’ needs and the requirements for our country’s development.

My administration has been working responsibly and persistently to meet a clear objective: to improve the lives of Chile’s men and women by increasing wellbeing, protection and equally distributed opportunities.

We are making progress with this.

We are achieving previously unimaginable goals and poverty and inequality are continuing to decrease despite the reduced economic growth.

This progress is a reflection of our will to continue making the changes Chile needs, as well as our meticulous management of the resources that belong to all Chileans. Given the slower economic growth and lower price of copper, we are going to continue to keep our finances in order.

Thanks to that responsibility, we are in a position to increase next year’s budget by 2.7%.

The austerity and prioritization of its design ensures that there will be funds for working toward our commitments and for addressing new challenges.

There are some priorities that this administration will always defend and that we as a country must not abandon.

First, we have placed the wellbeing, dignity and security of Chilean families at the heart of this budget. That is why expenditures on education, healthcare and public security will be prioritized. Together, these areas represent more than 8 out of every 10 pesos in the budget increase.

In education, this means the implementation of a new Professional Development System for Teachers, which will enable our teachers to become the driving force behind improving our elementary and high schools.

This budget also increases, by up to 470,000, the number of subsidized school students who will benefit from the end of the copayment system. This will increase to more than 2 million the number of students able to attend elementary and high school for free.

In a historic step this year, we enabled 140,000 students to study without cost at higher education institutions. We will continue down that path, increasing the education budget by 55%.

Furthermore, students from families in the five most vulnerable deciles who register at non-profit technical training centers or professional institutes that have been accredited for at least four years, will be able to study for free.

In 2017, we will therefore have the resources to double the number of young people with access to free higher and further education, including professional, technical and university programs.

There will also be funding to open state universities in the O’Higgins and Aysén regions and to implement the first five state-funded technical training centers outside of Santiago.

With regard to healthcare, the budget focuses on improving primary care.
We are setting aside the funds necessary to open 43 Family Health Community Centers, 46 High Resolution Emergency Centers and 3 new Mental Health Community Centers.

Of course, we will continue building the hospitals we have promised.

In order to increase the number of medical specialists available, we have allocated more than 180 billion pesos to our plan to train and retain specialist talent within the public health system, where they are needed most.

Thanks to these efforts, 1,087 new medical specialists will be added to the public health system.

We are also increasing funding for appointments and follow-up visits for families who come to ambulatory care clinics and rural hospitals by more than 73 billion pesos.

Public security is our third priority.

We are allocating funds for 1,500 new uniformed police officers to protect neighborhoods and fight crime. Furthermore, 250 new fully equipped police vehicles will be made available so that they can do their job well.

There will also be funding for modernization of the information systems and improvements to the 44 police operation centers.

We are going to increase the scope of prevention programs. This includes the 24 Horas (24 hours) and Liceo Libre de Drogas (drug-free schools) programs, which are specially designed for children and youth.

Second, this budget acknowledges that the State has a responsibility to create the conditions that encourage growth and job creation, as well as adequately protect those whose sources of income are impacted.

We will continue applying the tax law because our institutional credibility and the confidence required for private investment—domestic and foreign—depend on it.

This budget also sets aside the funds we need to continue supporting SMEs and to create environments favorable to private entrepreneurship.

The 50 Business Development Centers we promised will open next year; they will provide free assistance and technical support to small businesses throughout Chile.

The State of Chile will continue investing to bring dynamism to the economy—through public corporations, concessions and by keeping direct investment levels high. In total, this is an increase of 10.8% over last year.

We have decided to surpass our commitment to add 25,000 new homes to the Social and Territorial Integration Program announced on May 21st, increasing this total by an additional 12,500 new homes.

Furthermore, we will inject funding for 200,000 housing subsidies, neighborhood improvement initiatives, bike paths and the closure of 75 encampments.

This is in addition to the 22% increase in funding for new potable water projects in rural areas and the 7.3% increase for building basic roads.

Even though unemployment remains low, there are adequate employment insurance funds. Furthermore, the budget includes an increase of more than 30% in subsidies for hiring women and young people.

All of this will mean more economic growth, more employment and increased family wellbeing.

We know that Chile’s mining industry is going through a difficult time. That is why I want to announce that, as we work to support tax revenue targets, Codelco can rest assured that capitalization will continue so that its operation can be ensured for many years to come.

Of course, we are concerned about today’s low pensions. In my first term in Government, we took an important step in supporting pensioners and created the minimum solidarity pension.  The time has come to take another step.

I have called upon everyone to come together and create a National Agreement that provides substantive solutions. This is a long and necessary process, but the most vulnerable need solutions now.

I have decided to make a special effort in this budget to increase the basic pension and solidarity pension amounts by 10%. I will submit a bill of law that makes the increase effective as of January 1st.

Thus, the more than 1.3 million people who receive the minimum solidarity pension will see the State’s contribution to their pension increase.

We are going to increase funding to SENAME [National Minors’ Service] by more than 16.5 billion pesos to improve the quality of life and to safeguard the rights of the girls, boys and teenagers in the Residential Protection Centers.

As public works, education, healthcare and security programs are distributed, I have asked that special attention be paid to the La Araucanía region, where levels of poverty and violence unfortunately remain high.

My fellow Chileans:

The 2017 budget proposal is balanced, fiscally responsible and has been prepared in light of the principal needs of the people and the country.

In order to secure funding for these priorities, we will make the adjustments that times of lower income require.

Some things will happen more gradually because not everything happens at the same speed and we will prioritize expenses according to their level of impact.

Chile wants us to recover the deep-seated value of public service.

That is why we are going to freeze increases for the highest salaries in public administration, as well as set austerity standards for travel and per diems. The 3% reduction in ministry funding for goods and services implemented this year will remain in effect.

This budget is the best reflection of our continued desire to progress.

That is why Chile must recover its optimism, even in the face of difficulties.

Thank you and good evening.”

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Santiago, September 29, 2016

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