Against stagnation: Kast's proposals to return to the 'Chilean miracle'

José Antonio Kast won a resounding victory in Chile and will soon become the country's president. After many years in politics, the 59-year-old conservative reached La Moneda Palace, the Chilean presidential residence, as the most-voted candidate in the country's history. How did he do it? Kast relied on a political platform that, far from proposing a refoundation of the country or a profound revolution, focused on a simple message that resonated with the Chilean citizenry: back to what worked in the past.

Starting in the 1980s, Chile began to separate itself from the rest of Latin America by implementing a series of pro-market reforms that resulted in growth that for years was the envy of the region.

Due to various factors, from 2013 to the present, particularly since Michelle Bachelet's second government, citizens have experienced a slowdown in the famous "Chilean miracle." Growth rates that used to be 5% suddenly fell to 2%, dragging down investment, salaries and employment.

Making a soccer comparison, in this case with the Argentine Boca Juniors team supporter, which celebrated 16 championships between 2000 and 2010, a figure that was halved in the next decade, reaping only 8 trophies between 2011 and 2020. While not a catastrophe, it was far below the previous decade, leaving a more than interesting sense of dissatisfaction.

In this context, Kast and his team elaborated a series of proposals aimed at returning to the previous growth rate, while also addressing current challenges, such as insecurity and illegal immigration.

His program focuses on returning to the original idea: lower taxes, lower public spending and more investment incentives, combining this agenda with strong border security and an ambitious housing plan.

Kast's political platform that led him to win Chile's presidency

Kast won the election in his third presidential run, and to do so, he relied on an agenda that had a particularity: each of its points bore a name that was at least striking. Plan Relentless, Plan Border Shield or No More Taxes are some examples.

He made sure voters got to know them through a series of social media videos, in which the now president-elect presented them one by one.

Now, let's go over some of these proposals one by one.

Total Audit Plan

This proposal seeks to modernize the national government and make it more efficient by identifying waste and abuse.

As stated by Kast, this plan aims to counter the "culture of abuses, overpricing and networks of political operators" that today operate within the national State, weakening citizens' confidence in institutions.

Therefore, an exhaustive review of all ministries, services, sub-secretariats and public companies will be carried out, to identify accounting and administrative irregularities, overpricing, unjustified contracts and networks of political operators.

The Total Audit Plan will be carried out by the Comptroller General's Office and "world-class auditing firms."

Subsequently, the results will be published to the public, and an institutional committee will be created to oversee the implementation of corrections.

The final goal is a $6 billion adjustment in 18 months, 6% of the government budget. Three billion via administrative decisions and another 3 billion to Congress.

No more contributions

This part of Kast's agenda focuses on a measure with broad consensus in Chilean society: eliminating the payment of land tax for each individual's first home.

This is a patrimonial tax levied on the fiscal value of homes and land, something many consider distorting because it is in addition to other taxes already paid.

"In Chile, millions of families have made the enormous effort to access their own home. However, the State continues to punish them with an unfair and perpetual tax: contributions. This land tax affects in a very special way the middle class and the elderly who, even with very little income, must continue paying for a home that was already acquired with effort and with previous taxes," the plan reads.

If implemented, all first-time homeowners would be exempt from paying taxes, benefiting 749,577 families.

Border Shield

With a clear focus on illegal immigration, the Border Shield Plan aims to close and effectively control the borders, especially the one in the north of the country.

Kast argued that it had lost effective control over its land borders, so it is necessary to regain that control and exercise Chilean sovereignty.

To achieve his goal, the conservative proposes the permanent deployment of the Armed Forces, the installation of a high-tech surveillance system and the creation of a border control ring to detect and block illegal entries before they reach urban areas.

In addition, it proposes to make illegal entry grounds for expulsion and to carry out a deportation plan focused on foreigners with criminal records and members of criminal gangs.

When it comes to incentives, it includes heavy fines for those who hire illegals, the exclusion of illegals from public services and the construction of a wall, similar to that of "Hungary and Israel."

In this way, it promises to be "the strongest migration policy in the history of Chile."

Restart Plan

As its name indicates, this plan aims to reorder public finances and "reset" the functioning of the State.

It seeks to combat the growth of public employment without efficiency criteria, under a scheme that starts from scratch. This would be implemented by freezing all hiring, except for indispensable positions, to review the government's structure in a transversal manner.

In turn, all public programs will have to justify their continuity based on results, and an initiative of total transparency and digital transformation complements this.

"This plan is not against good public servants. It is for them. So that they may once again feel proud to serve Chile," the plan reads.

Relentless Plan

The Relentless Plan aims to combat organized crime and restore public order. Arguing that organized crime expanded under Gabriel Boric, and describing the situation as "one of the biggest security crises in history," the initiative puts forward five central axes:

Relief for SMEs

To revitalize the economy, this measure for small and medium-sized enterprises consists of alleviating the regulatory, tax and administrative burden they face.

To that end, it proposes making the labor market more flexible, facilitating access to credit, simplifying procedures and permits, creating a digital one-stop shop for starting a small business, revising regulations that do not distinguish between company size, and simplifying bidding requirements, among other things.

Plan Your House

The Plan Tu Casa aims to speed up access to housing through a series of measures designed to shorten waiting times and discourage squatting.

It is based on the premise that, on average, a Chilean family needs 11.4 years to gain access to housing, a figure expected to increase over the next few years.

To address this reality, Kast proposes a series of subsidies for land purchases, urbanization and construction, thereby increasing the number of homeowners.

Additionally, the Zero Deficit initiative, which aims to create Housing Emergency Zones,  will accelerate permits and administrative processes for housing construction. These zones would be located in the areas with the greatest housing deficit.

Rebirth Plan

At this point, Kast proposes to face a difficult demographic reality: "Chile is running out of children."

Indeed, there are only 14 countries with a lower fertility rate than Chile and in the last ten years births experienced a 30% drop.

Therefore, the president-elect aspires to "put families back at the center of public policies."

To that end, the plan includes income tax exemptions to encourage births, greater access to child care, expanding the Birth Child Allowance and creating an investment account for all babies at birth.

"We in the Republican Party want to reinforce our clear and concrete commitment to support families, mothers and fathers, who choose to have children. We want to put families back at the center of government policies, because their development and promotion benefit all of society," the Republican Party explains in the plan.

More and Better Jobs Plan

Kast's labor agenda is to increase formal employment and real wages, thereby generating incentives to hire.

Among the main proposals are the flexibilization and modernization of labor regulations, the elaboration of a new compensation system through an individual savings account, and the repeal of part of the pension reform, to ensure that "the totality of pension contributions go directly to the individual account" of Chileans.

Cerberus Plan

Another of Kast's central axes in security matters is the reform of Chile's prison system. According to the party's website, the plan takes its name from the mythical guardian of the underworld, who, in mythology, neither lets the living in nor the dead out.

"In its modern version, it represents an armored prison system, with no privileges, no communication with the outside, no impunity," the GOP explained.

The plan proposes the construction of maximum security prisons, an increase of 100,000 prison places, an increase in the number of prison officers, and the implementation of mandatory work programs for inmates to facilitate future reintegration into society.

Zero Plan

Finally, Kast's agenda concludes with a comprehensive health plan that seeks to transform Chile's public system, making it faster and adding "a sense of urgency and fiscal responsibility."

One of its most innovative points is the transfer of all care that cannot be resolved by the public system to the private sector through transparent, efficient agreements. An initial investment of U.S.$ 770 million is estimated, financed with part of the fiscal adjustment.