The Partido de la Gente announced on Wednesday that its agreement with the government to back the megareform bill has collapsed, accusing the administration of failing to include middle-class benefits such as VAT refunds on medicines and diapers. The decision marks a sharp turn after weeks of talks and internal divisions within the party.
PDG bench chief Juan Marcelo Valenzuela and deputy Fabián Ossandón explained that the bill presented by the government does not honor the pact and only includes a quarterly bonus that excludes households with two minimum wages. “The government did not keep its word,” Ossandón said.
The move follows the Autonomous Fiscal Council report that flagged nine fiscal risks in the initiative, including a higher deficit between 2027 and 2034. Economists Mario Marcel and Andrea Repetto criticized the employment tax credit for its high cost and limited impact.
Finance Minister Jorge Quiroz welcomed the CFA observations but announced that a Dipres team will address each point on Thursday in the Finance Committee. The government reiterated it will continue talks with all political forces to secure the needed majorities. Earlier this month, PDG leaders had met with ministers to negotiate improvements to the bill, but those talks ultimately failed to produce the concessions the party sought.
