Precatório: government will create alert system – 02/01/2024 – Market

To avoid new “meteors” of court orders in the future, the government will create an alert system to correct the problems that have led to the explosive increase, in the last ten years, of amounts owed to companies and individuals following a final court ruling.

The Ministry of Planning has already carried out a preliminary mapping of the types and causes of expenses with court orders and now, with the support of the AGU (Attorney General of the Union), it intends to use artificial intelligence to carry out an even more detailed overview of the court orders to correct errors of public policy, administration and defense of the Union that make this bill bigger every year.

The government also wants to reinforce control over fraud that may be fueling what has been called the precatório industry.

The diagnosis of the economic area is that the payment by the Luiz Inácio Lula da Silva (PT) government of R$ 93 billion in late court orders at the end of last year did not end the fiscal problem generated by the explosive growth of this type of expense throughout of recent years.

“It’s like that plane below the radar, but the meteors are coming and we weren’t mapping it,” he told Sheet the executive secretary of the Ministry of Planning, Gustavo Guimarães.

The word “meteor” for court orders was used for the first time, in mid-2021, by the then Minister of Economy, Paulo Guedes, after receiving an invoice of R$89 billion from the Judiciary to pay in 2022.

As it was an election year and the Jair Bolsonaro (PL) government wanted to increase the value of Auxílio Brasil (formerly Bolsa Família), Congress ended up approving a PEC (proposed amendment to the Constitution) that pedaled part of these expenses until 2027.

The text was called PEC do Calote. The Lula government reached an agreement with the STF (Supreme Federal Court) that allowed the payment of court orders outside the limits of fiscal rules. The payment of arrears became known as depelada dos precatório.

According to Guimarães, in the second stage, with the use of artificial intelligence, the government will analyze court orders from a micro perspective.

“Why are we losing so many court orders in BPC [benefício de prestação continuada], for example, the causes? Where is the Union losing? It’s concentrated in one place”, he said. “We know that in small regions the lawyer doesn’t even go, he’s already lost”, he highlighted.

As these already definitive sentences are very fragmented, amounts below R$10 million, mainly related to lost actions against the INSS (National Institute of Social Security) ended up being outside the fiscal risks that the government is obliged to map every year and send to Congress.

“If we look at the history since 2020, the meteor is not over. The solution will not come via fiscal rule nor should it be,” said Guimarães.

Last year, the Ministry of Finance proposed a rule to allow part of court orders to be classified as financial expenses definitively. After widespread criticism, the proposal did not move forward.

The measure would allow the Executive to increase payments without exceeding the limits of the new fiscal framework or needing to change the fiscal targets already signaled by the economic team.

Guimarães said that the agreement with the STF gave the government time to face the problem with better weapons so as not to compromise the future sustainability of the fiscal framework. The system will act as a kind of warning signal, but accompanied by corrective measures.

According to the secretary, the diagnosis is still ongoing, but allows the payment of court orders to constitute, in many cases, the last consequence of poorly formulated public policies.

Further studies will be carried out within the scope of the Judicial Tax Risk Monitoring and Monitoring Committee, with the Ministry of Finance and the AGU.

“Based on these analyses, we want to identify the main legal theses that have resulted in the payment of court sentences, acting at the origin to avoid the problem, solving it through administrative means or proposing legislative improvements”, he stated.

For example, if there is a large concentration of court orders questioning a specific point in the BPC grant, paid to low-income elderly people and people with disabilities, the government can propose changes to the legislation. Or even correcting problems caused by poor fine-tooth combing by the government, which interrupts the payment of benefits, but which could end up becoming a court order later on.

In 2024, the value of expenses with payment of court orders and so-called RPV (small value requisition) is R$86 billion.

Of a total of R$57 billion in court orders, R$18 billion are judgments against the INSS and R$8.2 billion related to government personnel expenses.