Venezuela Lawmakers Approve Extra Spending Ahead of Election

The finance committee of Venezuela’s National Assembly approved an extra 5.9 billion bolivars ($1.4 billion) in spending this year, in part to fund an increase in the minimum wage five months before the presidential election.

The additional expenditure will cover 30 percent of the increase in the minimum wage, decreed by President Hugo Chavez, for 3.8 million people, 3 million of them pensioners. Some of the funds will also finance a mausoleum in Caracas to honor South American liberator Simon Bolivar.

“The bulk of the impact is on the old folks who are pensioners,” Elias Matta, an opposition lawmaker who voted for the spending, told reporters after today’s committee meeting. “That’s where Chavez has a solid vote.”

Chavez, who has undergone three operations for cancer in the past eight months, is seeking a third six-year term in October’s election. Public spending climbed 17 percent to 81.19 billion bolivars ($18.9 billion) in real terms in the first quarter from a year earlier as the government prepared for the vote, according to calculations by Bank of America Merrill Lynch.

The extra spending approved today will also cover allowances to poor mothers, athlete development and computers for school children.

To contact the reporter on this story: Jose Orozco in Caracas at jorozco8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

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