TCU should assess this month whether the government could breach the health investment floor in 2023

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This Wednesday, the Senate approved a project that frees the Lula government from meeting the target included in the new fiscal framework. President of the TCU says that progress in Congress does not make analysis impossible. The president of the Federal Court of Auditors (TCU), minister Bruno Dantas, stated this Thursday (5) that the body’s plenary session must judge, within a maximum of 15 days, the Ministry of Finance’s consultation on the possibility of not investing , in 2023, the constitutional minimum in health and education. These floors existed in Brazilian legislation until 2017, but were changed by the spending ceiling and began to be corrected only for inflation – that is, without direct link to a percentage of the Gross Domestic Product (GDP). The original rule was taken over by the new fiscal framework, sanctioned by President Luiz Inácio Lula da Silva (PT). The government argues, however, that the obligation will only come into force in 2024. This Wednesday (4), the Federal Senate approved a bill that allows the Lula government to disregard this requirement to pay the minimum health care for 2023. The proposal goes to the president for approval. The project only covers the year 2023, and is not valid for subsequent years. “Obviously, with the approval of the bill by the Federal Senate, some additional analysis may need to be done, but this will all be seen by the rapporteur. There is no interruption [da consulta por conta da aprovação do projeto pelo Senado]. If there is a need for supplementation, the auditors will inform the rapporteur”, said minister Bruno Dantas, from the TCU. Chamber approves fiscal framework, which will replace the spending ceiling. If the government is forced to comply with the minimum investment in 2023, it will have to disburse up to an additional R$20 billion by December. Last week, the Secretary of the National Treasury, Rogerio Ceron, stated that the government would be talking to the TCU on the matter. “Proportionality, reasonableness, precedents that have already existed on similar situations, of produce expenses in the final stretch of a year that are compatible with current tax rules”, he said, at the time. Fiscal framework provides for floors The fiscal framework, the new rule for public accounts already approved by the National Congress, provides that health expenditure and education are readjusted again according to the old rules, which were in force before the spending cap implemented in 2017, that is, based on the government’s net revenue. Due to the resumption of this old rule, the 2024 budget proposal was sent considering these values. The main areas benefited were social assistance, transport, health and education. The Secretary of the National Treasury, Rogério Ceron, however, has already informed that the economic area will forward, in the second half of this year, a proposed amendment to the Constitution (PEC) to change the format for correcting the floor (minimum value) of health spending and education from 2025 – in practice, limiting resources.

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