Omar Aziz will maintain the calculation of the inflation of the Framework that came from the Chamber

Senate

Period will be from July of two years before to June of the previous year

The way of calculating inflation measured by the Extended National Consumer Price Index (IPCA) defined by the Chamber of Deputies, which will serve to define government spending, will be maintained in the report by Senator Omar Aziz (PSD-AM). The information was confirmed by the parliamentarian this Tuesday (20) after a meeting with the rapporteur for the project in the Chamber, federal deputy Cláudio Cajado (PP-BA).

This was one of the impasses of the text being discussed in the Senate. Thus, the text of the Chamber is maintained, which defined the period for calculating the IPCA as being from July two years before to June of the year before the budget year.

The government’s original project foresaw that the calculation would be based on the IPCA of January and December of the previous year. According to the Ministry of Planning, the text of the Chamber may delay the execution of up to BRL 40 billion of the budget in 2024.

The Chamber’s rapporteur argued that, as the Budget Guidelines Law (LDO) is sent in the middle of the year, the IPCA from July to December is a forecast, which could generate a “fictional budget”, said Cajado. For the deputy, if inflation in the second half is higher than forecast by the government, the Executive may send a PLN (National Congress Bill) to the Legislative with extra credit to recompose the budget.

The Minister of Planning, Simone Tebet, stated that it is possible to make this correction by sending a PLN. However, she warned that “a certain difficulty will be created in the execution, until May, of discretionary expenses of R$ 32 to R$ 40 billion”. Discretionary expenses are those that the government can define where to spend, different from mandatory expenses, which already have a destination defined by law.

Half term

The rapporteur for the New Fiscal Framework in the Senate, Omar Aziz, even presented a compromise proposal, with the calculation of the IPCA being made from December two years before to November of the year before the budget in question.

The proposal was well received by Minister Simone Tebet. “It would be the best of both worlds, but this is a political decision by the National Congress. For us, the important thing is that the framework comes out as quickly as possible”.

Maintenance of Triggers

Rapporteur Omar Aziz also denied that he will change the triggers for limiting expenses imposed by the Chamber. The project approved by the deputies provides that, in the event of non-compliance with the goals, there will be a blocking of discretionary expenses and suspension of the creation of new public positions.

If non-compliance occurs for the second consecutive year, it is prohibited to increase salaries in the civil service, to hire or hire staff and to hold a public tender (in the last two points, the exception is for replacement of vacant positions).

Omar Aziz also denied that he will remove expenses with the Nursing Floor from the new fiscal framework. The measure was included in the Chamber of Deputies and is criticized by workers in the category.

The only substantial changes proposed by the rapporteur remove Fundeb and the Federal Constitutional Fund from the fiscal framework. If the changes are approved, the text goes back to the Chamber for further analysis.

Despite positioning himself against the changes, the rapporteur in the Chamber stated that he will not make it a “workhorse” and that he will take the proposed changes to the college of leaders of the Chamber. “We can keep them or change them”, pondered deputy Cláudio Cajado.

Tax Framework

The fiscal framework is a set of measures, rules and parameters for conducting fiscal policy – ​​controlling a country’s expenditures and revenues.

The new fiscal rule should replace the spending ceiling that has been in force since 2016 and limits the growth of expenses to the previous year, corrected by official inflation, the IPCA.

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