Minimum wage, IR table, Bolsa Família and collection measures: see highlights of the 2024 Budget proposal

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The text was delivered this Thursday (31) to the National Congress, the last day of the legal deadline. The document deals with several important topics, such as readjustment of servers, zero deficit and recipes to get it, among others. The federal government’s economic team presented this Thursday (31) to the National Congress the budget proposal for the year 2024, the first one under the rules of the fiscal framework – the new norm for public accounts. The text deals with several important themes for society, such as the value of the minimum wage, readjustment for civil servants and for Bolsa Família (see details below). The bill also confirmed the economic team’s goal of zeroing out the deficit next year and introduced tax collection measures to try to achieve it. The vote on the budget for the following year is a requirement for the closure of the parliamentary year. With the approval, deputies and senators will be able to start the year-end recess. If it is not approved by December, the government has to execute 1/12 of the planned annual budget each month. The management of the global budget can only be released after the sanction of the text by President Luiz Inácio Lula da Silva. Government foresees an increase of R$ 101 in the minimum wage in 2024 See the main points ▶️ 1) The government sent to the National Congress the proposal that the minimum wage rise to R$ 1,421 in 2024, an increase of R$ 101 in relation to the current level , which is R$ 1,320. The proposal takes into account the new permanent policy of valuing the minimum wage of President Lula’s government, already approved by the National Congress, with an increase above inflation. The proposed value is still provisional. The minimum wage serves as a reference for 54 million people. ▶️ 2) The budget sent to the Legislative by the economic team brings a zero deficit objective for the government accounts in 2024. For analysts, however, this level will only be reached in 2028. The zero deficit sought by the government depends on measures to increase the collection, in the amount of R$ 168 billion, to try to achieve “balance” in the public accounts, that is, without negative or positive results next year. Among the planned measures are the taxation of “offshores” abroad and exclusive funds, announced in recent days. The complete list of actions to increase revenue also includes previously announced initiatives, such as the resumption of the casting vote for Carf. See how the Lula government intends to raise R$ 168 billion to clear the gap in the accounts in 2024 ▶️ 3) The Executive did not propose, in the budget piece, a salary adjustment for all federal public servants or for Bolsa Família beneficiaries – distribution program income. The economic area argued that, although legitimate, the civil servants’ request for a salary readjustment would be “reckless” given the “restrictive” scenario for public spending in 2024. In the case of Bolsa Família, the Ministry of Planning reported that the absence of readjustment in next year does not mean that the program is no longer a priority. The government also reserved R$ 526 million for public tenders in the 2024 budget. ▶️ 4) The budget project for 2024 did not bring correction to the Income Tax (IR) table for individuals. During the Planalto campaign, in 2022, then-candidate Luiz Inácio Lula da Silva (PT) promised to exempt people earning up to R$5,000 a month from the tax. Asked about the correction, the Federal Budget Secretary, Paulo Bijos, said that the measure “is for later, at the right time”. This year, the exemption range rose from R$ 1,903.98 to up to R$ 2,112. It was also established that anyone earning up to R$2,640 per month, the equivalent of two minimum wages, would no longer pay Income Tax. To make this possible, the government gave an automatic discount of R$ 528. ▶️ 5) The budget law text also provides for R$ 69,7 billion of public resources for investments next year. This represents an increase in relation to the R$ 22.6 billion proposed for this year (a value that was later increased by the PT administration). The money will be allocated, for example, to infrastructure works provided for in the New Growth Acceleration Program (PAC), announced this month by the government. The PAC also forecasts investments by state and private sectors. The increase in the amount allocated to investments complies with a device in the new fiscal framework, which established a floor for investments of at least 0.6% of GDP in 2024, the equivalent of R$ 68.5 billion. ▶️ 6) The budget project also provides for R$ 37.6 billion for parliamentary amendments, a value similar to that proposed for the year 2023. Parliamentary amendments are Budget resources that deputies and senators can determine where they will be applied. The government controls the pace at which amendments are released and, in general, tends to authorize their payment at times when it needs to strengthen support in the National Congress. ▶️ 7) The government estimated, in the budget proposal, that the growth of the Brazilian economy will be 2.3% in 2024, and that the basic interest rate will reach 9.8% per year. The numbers are above financial market expectations for next year. By the end of 2024, according to the latest Focus report by the Central Bank, analysts estimate: that the basic interest rate, the Selic, will be reduced to 9% — 0.8 percentage points less than projected by the government; and that Brazil’s Gross Domestic Product (GDP) will grow 1.33% — 1 percentage point less than projected by the government.

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