Pre-Budget will be sent before fiscal framework – 04/11/2023 – Market

The government will submit next Friday (14th) the draft LDO (Budgetary Guidelines Law) with “very ugly” numbers drawn up based on the spending ceiling to reinforce the need for a new fiscal framework, he said this Tuesday (11th). ) Minister Simone Tebet (Planning).

The statement was given at the end of a meeting with the leader of the government in Congress, Randolfe Rodrigues (Rede-AP), and with the president of the CMO (Mixed Budget Commission), Senator Daniella Ribeiro (PSD-PB). The deadline for submitting the LDO to Congress is April 15.

Tebet qualified the LDO proposal that will be sent as “atypical”. “Because the spending ceiling is not sustainable today. The roof was not only perforated, the roof fell on top of the house and is dragging the house”, said the minister.

“Given this scenario, we are facing an LDO with very ugly numbers, in light of the spending ceiling
We are delivering an LDO to the National Congress based on the only rule we have. What rule do we have? The spending ceiling,” he added. “We have a fiscal framework in the world of politics, but in the legal world we have a spending ceiling.”

The spending ceiling is a rule that limits expenditure growth to the previous year’s inflation and has become the main anchor of public accounts since it came into force in 2016. However, the limit has been circumvented several times, especially after the pandemic.

For critics, the ceiling stifled the government’s ability to react, especially in crisis situations, such as health.

According to the minister, the data that will be presented reinforce the need for a new fiscal rule, “because the one that is there eliminates the possibility of discretionary expenses”.

“The LDO comes with a number that stays there temporarily until the approval of the fiscal framework. We were very careful to put it there, linking the LDO to the new parameters of the fiscal framework, if approved by the National Congress”, he said. “It was this detail that we put in the LDO. We are conditioning the new numbers to a possible approval of the fiscal framework in the National Congress.”

Tebet stated that the framework was undergoing editorial changes, and said that the approval —or rejection— of the new fiscal rule “will not prevent the Ministry of Planning from filing, on Monday, the LDO with all the parameters that the fiscal responsibility law require.”

At the CMO installation, Daniella Ribeiro said that Tebet, at the meeting, signaled that the framework would be delivered on Monday (17). “We are going to move forward together in this work. This dialogue between the government and the National Congress is important so that we can do the best possible thing for the country”, stated the senator. It will still be necessary to appoint rapporteurs for the LDO, the revenue and the multi-year plan.