Education and Health will be out of the budget block

Budget

These blockages may be reversed later with changes in revenue and expense estimates

Brasilia DF) – The Minister of Planning and Budget, Simone Tebet, said this Monday (29) that the ministries of Education and Health, in addition to “minor portfolios”, with small budgets, will not be covered by the budget block of R$ 1.7 billion that the government is expected to announce this week.

The need to block discretionary expenditures in the Federal Budget is to comply with the spending cap rule, after a review in the volume of expenditures which had a projected increase of R$ 24.2 billion, according to the Bimonthly Report for the Evaluation of Revenues and Expenses, a document that guides the execution of the Budget and is published every two months.

“The JEO [Junta de Execução Orçamentária] already met, we closed the question in relation to that. I can only tell you that the smaller ministries, those with smaller budgets, and Education and Health, will be preserved”,

informed Tebet after leaving a meeting with the Minister of Finance, Fernando Haddad.

JEO is made up of the Ministries of Finance, Chief of Staff, Planning and Management. The head of the Ministry of Planning pondered, however, that this blockade is temporary and could be reversed in the coming months. Furthermore, as it will reach portfolios with larger budgets, there is no immediate risk of discontinuing public policies.

“It is a temporary block, this is accounting. You lock it, with the increase in revenue, in the next report you can unlock it. As the biggest portfolios, the biggest budgets will be, it will not be disturbing the execution, the continuity of public policies”.

According to the latest income and expenditure assessment report, recent months have seen an increase in expenses, driven mainly by the impact of the new minimum wage, which rose to R$1,320 since May 1st, affecting social security benefits, insurance unemployment, allowance, among others.

There were also R$ 3.9 billion in transfers to states and municipalities from the sanction of the Paulo Gustavo Law, which allocated resources to the cultural sector, in addition to complementing the national nursing floor. These blockages may be reversed later with changes in revenue and expense estimates.

These numbers reversed the BRL 13.6 billion break in the spending ceiling that had been presented in the previous report. The ceiling rule should be replaced by a new tax rule, which will be voted this week in the Chamber of Deputies.

The ceiling would break this year, but the Transition PEC, enacted at the end of last year, removed BRL 145 billion from the Bolsa Família spending limit and up to BRL 23 billion in investments, in case there is excess revenue.

The government also raised the estimated primary deficit from BRL 107.6 billion to BRL 136.2 billion, equivalent to 1.3% of the Gross Domestic Product (GDP, sum of goods and services produced in the country), according to the edition Income and Expenditure Evaluation Report for the 2nd bimester. The fiscal target for 2023 remains a primary deficit of BRL 238 billion (2.2% of GDP).

*With information from Agência Brasil

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