Haddad denies plans to change target zero for the 2024 Budget

Budget 2024

According to the minister, the bill has been prepared for two weeks

Finance Minister Fernando Haddad denied that the economic team intends to change the zero primary deficit target for the 2024 Budget. According to the minister, the bill is ready and cannot be changed two days before it is sent.

“There are no route changes. The Budget has been ready for two weeks. It is not a simple thing to make a federal budget. You can’t change anything in advance. I already told you. Stay calm! The Budget will be sent the day after tomorrow”,

declared the minister, upon his return from a meeting at the Planalto Palace this afternoon.

The minister had a meeting with President Luiz Inácio Lula da Silva and the ministers that make up the Budget Execution Board (JEO): Rui Costa, from the Civil House; Simone Tebet, from Planning; and Esther Dweck, from Management and Innovation in Public Services. According to Haddad, they discussed the sanction of the new fiscal framework, approved by Congress last week, and the submission of the 2024 Budget bill.

The new fiscal framework establishes that the government will have to zero the primary deficit target (result of government accounts without public debt interest) in 2024, with a margin of 0.25 percentage points of the Gross Domestic Product (GDP, sum of wealth produced in the country). This afternoon, several newspapers reported that some of the JEO ministers, including the PT president, deputy Gleisi Hoffmann (PT-PR), defended a change in the target to a deficit between 0.5% and 0.75% of GDP.

“The budget is balanced. Balanced means that primary income equals primary expenditure.”, he reiterated. According to Haddad, the Budget was concluded before president Lula’s trip to Africa. The purpose of this Tuesday’s meeting, the minister claimed, was to discuss annexes to the Budget and the explanatory memorandum for the bill.

Payroll exemption

Regarding the bill that intends to extend the payroll exemption for 17 sectors of the economy, Haddad said he is open to discussing a change introduced by the Economic Affairs Commission (CAE) of the Senate that may increase the Social Security deficit by BRL 11 billion.

“I was not sought after, not even by the sectors. I wasn’t wanted. We are completely open to sitting down with the municipalities to talk”,

said Haddad in the early afternoon, before leaving for the meeting in Planalto.

The Senate changed the project that intends to extend the tax exemption to include as beneficiaries about 3 thousand municipalities with up to 142 thousand inhabitants. Municipalities would pay lower rates, 8% of the payroll, instead of the current 20%.

The municipalities claim they need the measure because of the drop in revenue. The minister admitted the shrinkage of collections in July, which affected city halls due to the smaller allocation of the Municipalities Participation Fund. Haddad, however, asked city halls and congressmen to wait for the August data, which will only be released at the end of September.

“We cannot let ourselves be impacted for a month. Let’s wait for the August calculation, which seems to have reacted. I myself made it public that July was a big concern for the economic area”, commented the minister. In recent days, the leader of the Government in the Chamber of Deputies, José Guimarães (PT-CE), said that the government wants to slice the project to vote, separately, the exemption for companies and for city halls.

According to the National Confederation of Municipalities (CMN), the measure has an impact of R$ 7.2 billion to R$ 11 billion per year on the Social Security deficit. Unlike the states and large municipalities, which have their own social security systems for local civil servants, medium and small city halls contribute to the National Social Security Institute (INSS), in the same way as companies.

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