The Senate approved a modified version of President Javier Milei’s flagship reform bill known as Ley Bases in the early hours of Thursday. The controversial proposal, along with a fiscal package, will return to the Lower House for deputies to vote on the changes. 

If approved, the bill modified by the Senate becomes law. If the changes are rejected, the version approved by deputies in April does. Whatever deputies decide, there are articles of the bill that weren’t touched by the Senate and are thus guaranteed to be enacted.

Although there still is no confirmed date for the next session, it is expected to take place on the week of June 24.

The government made big concessions and modified several sections of its flagship proposals to garner more support in the upper house, particularly regarding pensions and privatizations. These are the key points of the Ley Bases as approved by the Senate.

Legislative powers

Once the Chamber of Deputies gives its final vote, Milei will be granted legislative powers over administrative, economic, financial, and energy-related issues for one year. The text also establishes a public emergency on those topics during that period.

Although several institutions were removed from the chopping block, Milei will also be allowed to close or restructure public organizations. Public institutions related to science and technology are now safe as well as those related to culture, including the National Cinema Institute (INCAA, by its Spanish initials).

Other institutions on the “safe” list are the National Genetic Database, the National Parks Administration, the National Meteorological Service, and the Agricultural Food Health and Quality Service (SENASA). The executive branch is also barred from taking over the administration of the Atomic Energy National Commission.

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Labor reform

The labor reform extends the probation period from three to six months, allowing the smallest companies to extend it up to a year. Pregnant workers would be allowed to work up to 10 days before giving birth, while another chapter eliminates sanctions against employers that do not appropriately register their employees. It also gives employers the option of replacing severance pay with a “layoff fund” which would come from employees’ salaries and paid to them in case they are fired.

This section also targets union protests, making company takeovers and “blockages” — preventing the company from operating properly as a form of protest — a fireable offense.

Pensions

A major change from the original text is the section regarding pensions. Senators eliminated an article that would have ended a 2023 pension moratorium that currently allows people to access a state pension by paying for missing years of social security contributions. If the Lower House accepts this change, the benefit will remain in place.

Privatizations

Privatizations were a key sticking point when the bill originally failed in February, and many company names were removed from the list when it went through both houses. The Senate took Aerolíneas Argentinas, mail company Correo Argentino, and Radio y Televisión Argentina — an entity grouping state-owned media outlets — off that list of public companies set to be privatized.

However, energy provider Energía Argentina and Intercargo — a company that provides airport boarding and baggage services — would still be completely privatized, while others, such as water-providing company AYSA and the train services, would be up for concession.

On Friday, Presidential spokesman Manuel Adorni said the government would insist on privatizing the companies removed from the list. “All public companies are subject to privatization,” he said, referring to Milei’s presidential mega-decree that turned all public companies into limited companies in December, the first step toward privatization. “We’ll see if it happens now or in the future, the Lower House will decide that.”

Large investments

The Incentive Framework for Large Investments (RIGI, by its Spanish initials) would grant tax benefits to companies that want to import and invest over US$200 million in Argentina. They would be exempt from national and provincial taxes and allowed to import goods without paying fees.

Any previous provincial laws opposing this framework would be nullified, but only in those provinces that decide to take part in it, senators specified. Ecology experts have contested that this would mean allowing mining companies to exploit areas with local laws that protect water or that specifically ban strip mining.

Senators also introduced some modifications to the text to protect and promote local producers and employ Argentines after criticisms about how this framework would benefit imports and foreign capital to the detriment of national small and medium companies. RIGI will be limited to companies from the forestry, mining, energy, technology, tourism, steelmaking, petrol and gas industries.

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