By Alex Kennedy
Jan. 5 (Bloomberg) -- Venezuelan Finance Minister-designate Rodrigo Cabezas said the government plans to regulate corporate earnings to boost funding for education and health programs.
Cabezas didn't specify how earnings would be regulated during a televised speech before congress in Caracas.
``Regulation of earnings, to be used for education and health, will be a priority for us,'' Cabezas said. ``We ask for understanding from financial and economic sectors, but if there's no understanding, with the force of the people, the president and congress, we'll make the necessary reform.''
The government may cap corporate earnings, which would undermine private investment and job creation, said Miguel Octavio, executive director of brokerage BBO Servicios in Caracas.
``It's a very dangerous game,'' Octavio said. ``I don't know if they've thought through the impact a measure like that would have.''
Regulation of earnings would escalate the government's role in Venezuela's economy, the third-largest in South America. President Hugo Chavez has restricted foreign currency trading and set prices for food, electricity and telephone services since 2003.
Cabezas, who replaces Nelson Merentes next week as minister and is the president of the National Assembly's Finance Committee, called on congress to pass laws that combat ``capitalist values, such as selfishness and individualism.''
``We have to confront the concentration of capital in a few hands,'' Cabezas said. ``We can't have companies that just care about making money.''
Venezuela's economy in 2006 grew 10.3 percent, central bank President Gaston Parra said on Dec. 29, as Chavez used record oil income to boost government spending on health, education and food programs.
To contact the reporter on this story: Alex Kennedy in Caracas at akennedy1 at bloomberg.net . Last Updated: January 5, 2007 14:51 EST
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