Lula launches New PAC with a promise of BRL 1.7 trillion in resources

President Lula launches this Friday (11), in Rio de Janeiro, the new version of the Growth Acceleration Program (PAC). The government promises that the program will involve R$ 1.688 trillion in public and private resources. The communiqué released by Planalto in the early morning, however, does not say how long this money will be invested.

According to the government, the investments foreseen in the so-called “New PAC” will come from the following sources:

• Federal Budget: R$ 371 billion;
• state-owned companies: BRL 343 billion;
• financing: BRL 362 billion; It is
• private sector, R$ 612 billion.

The launch of the program takes place before the approval of the new fiscal framework, responsible for defining what the government spending limits will be for the coming years.

Even before the hefty public investment promised for the PAC, analysts already pointed out that the Minister of Finance, Fernando Haddad, will have enormous difficulty in meeting the goals of the fiscal framework that he himself presented. He needs at least R$ 100 billion to zero the primary deficit in 2024.

Not by chance, the government has proposed a flurry of tax increases to try to close the fiscal hole. This Thursday (10), for example, the Treasury confirmed that there are “negotiations regarding future adjustments” in the taxation of online purchases from abroad – in other words, the exemption for imports of up to US$ 50 should end, giving way to a rate that can reach 20% at first.

According to the government, the works foreseen in the New PAC cover nine “investment axes”. They are, according to the nomenclature chosen by the Planalto:

• sustainable and resilient cities: BRL 610 billion – Minha Casa Minha Vida, financing for real estate, urban mobility, urbanization of slums, sanitary sewage, solid waste management, containment of slopes and fighting floods.
• energy transition and security: BRL 540 billion – energy and oil
• efficient and sustainable transport: BRL 349 billion – roads, railways, ports, airports and waterways
• defense: BRL 53 billion
• education: BRL 45 billion – kindergartens, full-time schools, federal institutes and universities
• water for all: BRL 30 billion
• health: BRL 31 billion – basic health units, polyclinics, maternity hospitals, ambulances, vaccines, blood products and telehealth
• digital inclusion and connectivity: BRL 28 billion – internet in public schools and health units
• social and inclusive infrastructure: BRL 2 billion – spaces for culture, sport and leisure

In addition to the investment axes, says the government, the New PAC has five groups of “institutional measures”, which are:

• improvement of the regulatory environment and environmental licensing;
• credit expansion and economic incentives;
• improvement of concession mechanisms and public-private partnerships (PPPs);
• alignment with the energy transition plan; It is
• planning, management and public procurement

New PAC repackages old projects

The re-edition of the Program, which was launched in the first Lula government and redesigned in the Dilma government, is a strategy to try to increase the government’s popularity.

The other editions of the PT program, however, were marked by various irregularities, such as overpriced works. And part of the investment promised for this new edition will be in unfinished projects from previous PT administrations.

In the first version of the PAC, in 2007 with a focus on infrastructure works, the results were not encouraging. In 2019, a report by the Federal Court of Auditors (TCU) pointed out that only 9% of the works carried out through the program between 2007 and 2009 were delivered by the PT administration.

In the second edition, in the Dilma Rousseff government, the TCU indicated that only 26% of the works were delivered in the period from 2011 to 2014. In addition, the court pointed out serious irregularities in 32 infrastructure works that received federal funds. According to the TCU, the main irregularity was overbilling.