Chile Elections – Boric and Sichel Platforms

The Chilean presidential primaries took place over the weekend. Leading up to the primaries, far left candidate, Daniel Jadue and center right candidate Joaquin Lavin had been polling high.

When the polls closed and the votes were counted last Sunday, two new candidates emerged that clearly shows that although Chileans want change, they are not looking at the extremes of the political spectrums.

Turnout in the primaries was high with more than three million voters — the highest since the primaries system was introduced in 2013.

On the left, 35-year-old Gabriel Boric won with 60.4% of support, beating Communist Party candidate Daniel Jadue, a front-runner whose platform included some very aggressive economic and social reforms.

On the right, independent candidate Sebastian Sichel, won with 49.1% of the vote. He defeated three other candidates, including Joaquin Lavin, a well-known Chilean politician.

Both Boric and Sichel will now advance to the first round of presidential elections on Nov. 21. Both will be challenged by other candidates in November who chose not to participate in the primaries.

For many outside Chile, both Boric and Sichel are unknown figures. We have provided a brief overview of their platforms below.

Gabriel Boric

Gabriel Boric is the youngest candidate (35) and narrowly met the minimum age requirement earlier this year to run for presidency. He is said to be a moderate voice from the center left. Boric came to national prominence as a leader in the 2011 student protests, demanding free university education. He won a seat in Chile’s lower house of Congress in 2013 and was reelected in 2017. He has been known for reaching across the aisle to make agreements with the opposition.

Woman and the Work Force

Boric wants to increase female participation in the workforce. Particulary after Covid-19, where many woman were forced to abandon the workforce in order to look after family during the crisis. He plans to introduce an employment subsidy for woman to encourage the hiring of woman and increase their participation in the work force.

Boric wants to reform current laws so that there is universal access to institutionalized daycare for girls and boys under 2 years of age. He will also extend assistance for caregivers of people with disabilities, elderly people with some illness or bedridden, etc. Lastly, funding for after school programs.

Boric wants to create programs and training for woman in areas that will be relevant to future occupations such as trades, science, technology, engineering, and mathematics.

Economy

Boric wants to reactivate the economy by doubling down on the transition to carbon neutral future. He wants to make public investments in green initiatives and create programs that help small to medium size businesses participate in these new sectors. He supports renewables at a residential level, community net billing, and strengthening the power grid in areas of low populations which have higher outages compared to the national average.

Boric wants to strengthen union organization, collective bargaining, and the right to strike. He will also seek to reduce the working day to 40 hours a week, limit layoffs due to “company needs”, review the employee bonus system and establish that the boards of large companies have 50% representation of workers. He will put in place measures to end labor informality.

In terms of tax reforms, Boric wants to disintegrate the current tax system which has two options where companies and their owners pay taxes separately.  He wants to eliminate unjustified exemptions, make changes to the mining royalty, increase taxes on high-net-worth individuals, and lastly, introduce green taxes to combat climate change, such as adjustments to taxes on fuels.

Education and Health

Boric wants to transform how the educational system is financed. It implies eliminating the school voucher system and moving towards a more equitable financing system.

For university education, he wants to improve the current financing mechanism in two ways: The first, recognizing the role of state universities and the second, expanding gratuity and eliminating debt related to education

For technical professional education, he wants to improve the financing of state institutes, ​​incorporating financing that allows them to fulfill their role as regional coordinators of education.

Boric wants to create a plan for attracting and training teachers for the 21st century by offering free university and in the best public universities. In coordination with the union, he wants to improve professional conditions and reverse de-professionalization.

Boric wants to move towards a Universal Health System by creating Fonasa Universal. Fonasa is the current government led insurance. He wants all people to be affiliated to said institution collecting contributions of the workers (7%) together with the contributions from the State. The ISAPRE’s (private health insurance) will be transformed into voluntary supplementary insurance. The goal is to increase fiscal investment in health to reach 9% of GDP.

Regarding prescription medicines, he wants to make legal changes that are necessary for medicines to be understood as a public good. Create a national laboratory for the strategic production of medicines and vaccines and expand the coverage and dispensing of medicines in the public system. In the private system, prices will be set for drugs throughout the production chain. The goal is that the Fonasa insurance will provide coverage for the purchase of drugs in pharmacies.

Pensions

Boric proposes moving towards a universal pension that is equal to the minimum wage. This Universal Basic Pension of $250.000 per month is created for all people, regardless of their pension contributions to date.

His proposal replaces the current private pension fund managers with an autonomous public entity that oversees investing the pension savings and managing the accounts.

For people who have not yet retired but have funds in their individual savings accounts with the current private fund managers (AFP), the voluntary transfer to the new public solidarity system is allowed and encouraged. Thus, the pensions of this group of people will be paid by

1) the individual savings account of each person accumulated up to that moment and 2) the new Solidarity Pension Fund.

Workers who currently do not have funds in their individual savings accounts will automatically enter the new system and their pension will be financed entirely with the Solidarity Pension Fund, which will be calculated based on contributions, with recognition of unpaid care work and subsidizing those with periods of unemployment.

For a link to their full programs. See here. (Spanish)

Sebastián Sichel – Sebastian Sichel is a 43-year-old lawyer, that has run as an independent candidate and is aligned with center right. Sichel practiced law and was a law professor before Piñera appointed him as vice president of the economic development agency Corfo in 2018, then as minister of social development in 2019, and then with Chile’s state bank. He was the youngest candidate this year from the right and the only one who has traveled through different political paths –  before joining the government of Sebastián Piñera, he was a member of the Chilean center-left Christian Democracy (DC) party. He was also in the center pact, Ciudadanos, and even worked for the government of former socialist president Michelle Bachelet.

Economy

Sichel proposes a number of measures to recover the economy after Covid19. He wants to promote a public investment plan and accelerate concessions and private investments. Priority focus will be on water infrastructure (such as reservoirs and irrigation works), improve logistics (such as rail infrastructure, roads, and ports), better neighborhoods and parks, better housing construction emphasizing thermal insulation, etc.

Create the Permanent Salary Subsidy: Permanent subsidy and automatic payment for dependent workers with an ordinary working day (greater than 30 hours). Those who receive the minimum income will receive a subsidy of CLP $96.000, which will go entirely to their pocket; and those who receive a remuneration higher than the minimum will receive a gradually decreasing contribution from that same amount. The subsidy for workers who earn more than the minimum, instead of extinguishing when gross compensation reaches CLP$394.000 as it currently does, it will do so when it reaches CLP$518.000.

To provide the Labor office with sufficient tools to better monitor for informal working arrangements and conditions. Training on labor law is also expected to ensure citizens understand their rights.

Increase the budget for at least the years 2022 and 2023 with a specific goal of 100,000 digitally trained small to medium size businesses per year and with access to digital tools provided by state subsidies such as access to digital platforms, Point of Sale systems (POS), and payment methods.

A single strategy for entrepreneurship and innovation. This will require that the government agencies (FOSIS, SERCOTEC and CORFO) unify their strategies to deliver the tools that micro and small businesses need for their development

Regarding taxation, he wants to increase tax collection through a set of gradual changes that would be used to improve the system. He wants to eliminate exemptions that are not justified, increase the progressivity of the tax system, strengthen green taxes, increase taxes on harmful substances (such as foods high in sugar or nicotine) and have better enforcement of tax evasion. Lastly, he proposes to return VAT through a subsidy to the middle class and vulnerable sectors that is equal to what they spend on medicines and food.

Pensions

Sichel will end the current AFP model, allowing each contributor to choose whether their pensions are administrated by the state institution, a private for-profit institution, or a private non-profit institution.

Improve current and future pensions by moving towards a universal basic pension (PBU) and strengthening the pension savings system.

Increase the minimum pension granted by the State (PBS) for those who have no savings in the pension system to CLP$177.000. For those who have saving, they will obtain an APS of CLP $177.000 without any discount if their pension does not reach the minimum liquid income CLP$270.000.

In addition, he is expected to extend the coverage of the minimum pension (PBS) to all Chilean or permanent foreign residents who reach the retirement age and have a certain number of years in the country.

To ensure the sustainability of the State’s contributions, it is proposed to create a Solidarity Pension Fund from which the PBS and APS will be paid and will receive contributions annually from the state budget.

Allow citizens to loan themselves money from their pension savings for a down payment on their first home or for catastrophic healthcare expenses.

Health and Education

Sichel will look to accelerate the implementation of the Teacher Professional Development System, for all teachers in the country who enter the career. He will strengthen the initial training of preschool educators through a Scholarship program for training abroad.

Universal Higher Education Credit: available for both undergraduate and graduate careers, without restriction or discrimination due to socioeconomic origin and the only requirement will be that the recipient is Chilean or a Chilean and accreditation of the university. The credit includes the request for minimum salary for students who require it. The loans will be paid back for a maximum of twenty years at a real rate equivalent to the cost of financing from the State, with a limit of 2%, and where the fee will not exceed 10% of the person’s disposable income.

Universal Health Plan: The entire population will have access to the same health plan, which will be comprehensive in services, of quality and will cover the minimum needs. This plan must be offered by all insurers (with the same service package). The premium for this plan will not discriminate against people according to their risk, so it will be a fixed price for all beneficiaries of the same insurer. It will include outpatient medications.

Create a Network of Treatment and Support Centers for cancer patients in different areas of the country, and combat with special emphasis the pandemic of obesity, smoking, alcoholism, and the effects and associated burdens of these diseases.

For a link to their full programs. See here. (Spanish)

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