Government increases health and education blockade, but releases it to NovoPAC

The government of President Luiz Inácio Lula da Silva (PT) increased the blocking of spending in essential areas such as health and education, while releasing resources for ministries with NovoPAC projects and for parliamentary amendments, although still suspended by the Federal Supreme Court. With the recent release of R$1.75 billion, the total frozen value fell to R$13.3 billion, but the distribution of cuts between ministries has changed.

A decree published this Monday (30) details the cost containment announced on the 20th and points out that the Ministry of Health is the most affected by the trespass, with the blockade rising from R$4.4 billion to R$4.5 billion . The folder is the hardest hit on the Esplanada.

The Ministry of Education, which had R$1.3 billion frozen, saw this amount increase to R$1.4 billion. According to the Ministry of Planning and Budget, the distribution of the blocks followed the guideline of ensuring the “continuity of public policies to serve the population and the federal government’s commitment to the fiscal result target established for the year 2024”.

On the other hand, the government released a total of R$1.75 billion, with R$827 million allocated to NovoPAC, and R$647 million for expenses controlled by the ministries. The government also authorized R$274 million for parliamentary amendments amid discussions with the STF, which will have a new hearing on the 10th.

The government announced that the ministries and other bodies affected by the trespass will have until the 7th to “adopt adjustment measures to indicate the programs and actions to be blocked”.

“The blockade, which leads to the cancellation of discretionary expenses to meet mandatory expenses, occurs to comply with the limit of R$2.105 trillion set for primary expenditure this year,” said the Ministry of Planning and Budget (MPO) in note, commanded by Simone Tebet.

The release of resources will only be possible if public accounts are up to date, which is currently not the case due to the increase in mandatory expenses, such as pensions and social security benefits, which have increased the budget blockage.

Also affected – to a lesser extent – ​​were the ministries of Cities, with a blockade reduced from R$2.1 billion to R$1.8 billion, and that of Transport, from R$1.5 billion to R$986 million.

In July, the government had already blocked R$15 billion from the Budget, mainly affecting programs such as Farmácia Popular, Auxílio Gás and highway concessions.

Expense blocking occurs when there is an increase in mandatory expenses, such as pensions, and aims to ensure compliance with the spending limit established by the fiscal framework. The contingency, which was dismantled, is used when there is revenue frustration, to maintain the fiscal target – which for 2024 and 2025 is to bring the public deficit to zero.

The target has a tolerance band of 0.25% of GDP, allowing a deficit of up to R$28.8 billion without it being considered non-compliance.