Chile's Bachelet pitches $15 billion plan, vows to back labor unions

Reuters News
Posted: Oct 27, 2013 5:21 PM
Chile's Bachelet pitches $15 billion plan, vows to back labor unions

SANTIAGO (Reuters) - Chile's presidential frontrunner Michelle Bachelet said on Sunday that if elected she will fortify labor unions and roll out an ambitious $15 billion spending program - more than half of which would fund education.

The center-left candidate, poised to sail to victory in either November's general election or a runoff in December, said she wants to stop companies from "slyly" limiting union power.

"We must strengthen unions and carry out a package of modifications to collective bargaining to allow more workers to practice this right," Bachelet said in a 200-page report outlining her policy proposals, published on Sunday.

Bachelet said Chile, the world's top copper producer, is burdened by inequalities, poor public services, and policies that put an elite few before the interests of the majority.

Many Chileans feel the riches of the copper boom of recent years have not trickled down to them. Protests are on the rise, in particular from local communities opposed to mining and energy projects they see as polluting, and from students who want improved education.

Tax reforms would allow Bachelet to shore up $8.2 billion to spend on education, the report said. Available government funds would allow her to spend $4.7 billion on other proposals, and $2.2 billion could be diverted from existing budgetary outflows.

"The deep and lasting reforms included in this program ... will be carried out over a solid fiscal foundation," Bachelet said. "Our proposal is ambitious, but we can do it."

Bachelet's spending plan is nearly $2 billion less than one set forth by her chief rival Evelyn Matthei, the representative for the incumbent right-wing coalition, trailing a distant second in polls.

Matthei - one of eight other candidates vying for the presidency - wants to fund spending from economic growth rather than tax changes.

Bachelet, who governed as Chile's first female president from 2006 to 2010, appears to have turned to the left since leaving power, making education and tax reforms the central planks of her bid to return to La Moneda palace.

She has said she wants to "work towards" free education, a chief demand of student leaders who have led massive protests in recent years.

Last week the Organization for Economic Co-operation and Development published a report urging Chile to tackle income inequality by boosting spending.

However, Bachelet faces significant challenges to her planned reforms, including an electoral system that means she is unlikely to win a large Congress majority, a slowing economy and an unwieldy coalition.

(Reporting By Antonio De la Jara, Writing by Mitra Taj; Editing by Nick Zieminski)