Tebet: Blockade of R$ 1.7 billion will preserve Education, Health – 05/29/2023 – Market

The blockade of R$ 1.7 billion in discretionary expenses announced by the Lula government (PT) will not affect ministries with a smaller budget or ministries such as Education and Health, said this Monday (29) Minister Simone Tebet (Planning).

The statements were given after a meeting with Minister Fernando Haddad (Finance) in which topics such as the fiscal framework, tax reform and provisional measures were discussed.

According to Tebet, there has already been a meeting of the JEO (Budget Execution Board) to discuss the issue. “What I can only say for you to be calm is that the smaller ministries, which have smaller budgets, and Education and Health will be preserved”, he said.

The minister stated that the blockade will probably be temporary. “That’s accounting. You block it and, with an increase in revenue, in the next report you will be able to unblock it. As the largest portfolios, the largest budgets, you will not be disturbing the execution, the continuity of public policies. This is big concern,” he said.

“I can already tell that they are not the little folders [que serão feitos os bloqueios], and we are preserving Health and Education, which are relevant folders. Then whether it will be linear, whether it will be a little more in another, it has already been decided by JEO, but we will leave it to be announced at the right time.”

The blockade was announced last week, after the government of Luiz Inácio Lula da Silva (PT) was forced to worsen its projection for the result of public accounts this year due to a sharp increase in expenses.

The deficit is estimated at R$ 136.2 billion, equivalent to 1.3% of GDP (Gross Domestic Product), according to the Revenue and Expenditure Assessment Report for the 2nd bimester, released last Monday by the Ministry of Planning. The value represents a deterioration of R$ 28.6 billion in relation to the last forecast, released in March.

Expenses increased by BRL 24.2 billion compared to the March report, which blew all the slack there was in relation to the spending ceiling — a rule that limits the growth of expenses to inflation, and is still in effect. With that, the government will need to block BRL 1.7 billion in discretionary expenses (which include funding and investments).

Tebet and Haddad will discuss the framework with the president of the Senate this Thursday

Tebet and Haddad were invited by the president of the Senate, Rodrigo Pacheco (PSD-MG), to meet with party leaders this Thursday (1st) to discuss the fiscal framework, whose vote in the Chamber ended last Wednesday (24th). ).

In the minister’s assessment, it is possible to vote on the text directly in plenary. “But I think there’s no problem going through the CAE [Comissão de Assuntos Econômicos]“, he said.

If approved by Congress, the new fiscal framework will replace the current spending cap, a rule that limits spending growth to inflation.