Haddad downplays criticism from PT’s political wing – 03/01/2023 – Market

The Minister of Finance, Fernando Haddad (PT), who was at the center of a public struggle in the government of Luiz Inácio Lula da Silva (PT) over the return of the collection of federal taxes on fuel, downplayed this Wednesday (1st) the criticisms made by the political wing of the party.

The current holder of the economic portfolio recalled that, in 2003, the then Minister of Finance, Antonio Palocci, was also the target of the PT bench in the first year of Lula’s government.

“I don’t know if in March or April 2003, there was a petition signed by the PT group in the National Congress asking for Palocci to be replaced. That is natural”, said Haddad in an interview with the UOL portal.

Right at the beginning of Lula’s first term, Palocci heard the party criticize the conduct of economic policy. Also in January of that year, there was an increase in the basic interest rate (Selic) from 25% to 25.5% per annum.

In the current government, PT members and political allies defended the maintenance of zero rates on gasoline and ethanol, with an eye on the impact on consumers’ pockets and on the popularity of the Chief Executive. One of the most critical voices of the measure was PT president Gleisi Hoffmann (PR).

The economic team, on the other hand, pleaded for the return of taxation on fuels in an attempt to increase the collection of the Union and mitigate the R$ 231.55 billion shortfall in public accounts.

At UOL, Haddad downplayed criticism from the government’s political wing and highlighted that the PT president praised “the sensitivity and balance of the decision” after the announcement of the measures.

The minister referred to Gleisi as a person who has “strong opinions”, but stressed that the final word rests with President Lula.

“The important thing is that she defended President Lula’s decision, which was what I expected from her, who is a person who has strong opinions, but who knows that the final decision, who arbitrates the conflicts of positions within the government and outside the government is President Lula,” he said.

As for the return of taxes, it was decided that the PIS/Cofins rate rises to R$ 0.47 per liter of gasoline and R$ 0.02 per liter of ethanol, while the Cide (Contribution for Intervention in the Economic Domain) remains reset. The government also defined that it will tax crude oil exports at 9.2% for four months.

While the situation was open, Gleisi defended the definition of a new price policy for Petrobras before the discussion on the resumption of federal taxes on fuels. “We are not against taxing fuel, but doing so now is penalizing the consumer, generating more inflation and failing to fulfill a campaign commitment,” she wrote on a social network.

After the announcement, the PT president –who had been informed by Lula of the terms of the proposal– praised the measure on social networks. “President Lula had the sensitivity to reduce the impact of fuel recharging on the consumer’s pocket, with a reduction in tax rates and the price at the refinery”, stated Gleisi.

Without directly mentioning the Minister of Finance, the federal deputy defended the construction of a fairer price policy and the revision of what she called the indecent distribution of dividends by Petrobras.

The final decision on fuels was interpreted as a victory for Haddad in the public arm wrestling match in government. The head of the economic portfolio, in turn, said that he prefers “not to reason that way”. According to him, “Minister of Finance doesn’t win all of them, in fact he loses the majority”.

In addition to fuel prices, pressure from members of the government and Lula’s allies on Haddad includes other points on the economic agenda. A particular concern has been the credit scenario in the country.