President Boric presented the “Stronger Regions” bill this afternoon during his tour of Los Lagos Region.
The new government initiative is the most significant in fiscal decentralization since the return to democracy. It will enable the country’s regions to make more direct decisions about their own resources.
If passed into law, this bill will generate new sources of income for the country’s regions.
We want to strengthen the fiscal institutional framework of regional governments because, in this way, we can contribute to bringing democracy closer to Chile’s regions and, therefore, the people that live there.
The “Stronger Regions” bill will allow regional authorities to make decisions that better represent their inhabitants.
This will be achieved by empowering regional governments to make decisions on the use of resources according to the needs and realities of each area.
The initiative that seeks to strengthen the country’s regions will also better acknowledge the diversity that exists throughout Chile.
A bill that goes beyond what was promised by President Boric
With this initiative, the Government goes beyond what was initially promised in the Regional Income Law, which only aimed at strengthening the sources of income for regional governments.
"I am very pleased to announce the Stronger Regions bill. We will submit it to Congress during May, and I hope to be able to count on the cross-cutting support that we see here today, represented by the parliamentarians who are accompanying us,” President Gabriel Boric.
Progress will thus also be made in:
- Giving greater financial autonomy to Chile’s regions
- Streamlining regional public investment
- Raising the standards of transparency and probity
Bill to strengthen Chile’s regions creates “Permanent Fund for Interregional Equity”
The Government wants all of Chile’s regions to make progress on development and greater well-being in an equitable manner. For this reason, the Stronger Regions bill proposes a new Permanent Fund for Interregional Equity.
The new fund modifies the current National Fund for Regional Development to focus on reducing the gaps that occur between regions, due to the specific reality of each of them.
It will allow the allocation of resources to be simplified, and will give greater powers to regional governments to decide how they will be spent.
"This bill goes beyond what we initially committed to in the government program, in the Regional Income Law, because we are convinced of its importance, thanks to the dialogue that we held at the national level with regional governments,” President Gabriel Boric.
Citizens currently demand more information from institutions and authorities on how public resources are used. For this reason, this bill will improve the fiscal transparency and accountability mechanisms of regional governments.
Advantages offered by the “Stronger Regions” bill
Among the advantages of the “Stronger Regions” bill are:
- Reduction in consultations, permits and visa requirements from the central level, allowing the works and programs of regional governments to be carried out more agilely, responding directly to local decision-making.
- Simple, efficient and equitable regional financing, with a transparent distribution of resources that is not subject to central government control when defining the priorities of each region.
- The bill will allow regions to design mechanisms to generate their own income in the future. Additionally, it improves the allocation and distribution of sources of income linked to patents and rights, such as taxes on casinos or mining patents.
- Improvement of productivity by strengthening and reinforcing coordination mechanisms for regional public investment, to make decision-making more effective and generate greater state efficiency.
- Better investment decisions, because they will be in the hands of regional institutions that are more capable and up to speed with identifying regional development and productivity needs.
- It provides transparency and accountability tools to local communities, so that they can hold their respective territorial authorities accountable for how fiscal resources are used.
- Channels and tools to improve the coordination of public investment between regional and municipal organizations and public services. This will provide safer environments and greater well-being through the construction of hospitals, roads and public lighting, among other things.
The bill will ensure that regional resources are managed in response to local needs, with the utmost transparency and integrity.
Chile is currently among the most centralized countries in the Organisation for Economic Co-operation and Development (OECD), which is reflected in multiple gaps according to different global indicators.
The “Stronger Regions” bill, together with other measures promoted by the Government, such as royalties from large-scale mining, will drastically reduce these gaps, bringing Chile closer to the OECD average.