Tebet says LDO will be “atypical”, with spending cap and alternative for new fiscal rule

The Minister of Planning and Budget, Simone Tebet, said that the government will file this Friday (14th) a proposal for an “atypical” Budgetary Guidelines Law (PLDO) in the National Congress. The minister pointed out that the atypical nature of the 2024 LDO occurs because the proposal will be presented based on the spending ceiling, a fiscal rule still in force in the country.

“It’s atypical because we know that the spending ceiling, today, is no longer sustainable. It wasn’t just punctured, it fell on top of the house and is dragging the house. So, given this scenario, we are facing an LDO with very ugly numbers, in light of the spending ceiling,” said Tebet this Tuesday (11) to journalists in Brasília, reported the g1 portal.

However, the LDO will also bring an alternative scenario, based on the new fiscal framework. This version will present the possibility of expanding expenses. “So the LDO comes with a number that stays temporary [feito com base no limite para gastos com a regra do teto] there until the approval of the fiscal framework… We are conditioning new numbers to a possible approval of the fiscal framework in the National Congress”, explained the minister.

Tebet further stated that the 2024 LDO and the new fiscal framework, which will replace the spending cap, will not be presented to Congress at the same time. The text of the new fiscal rule still needs to be adjusted by the Ministries of Planning and Finance.

“If we continued with the spending ceiling, we would have zero, and when I say zero, I mean zero, it’s something less, in terms of the possibility of the government spending discretionarily. We would have to scratch, consume, part of the expenses mandatory if the spending cap remains, or remains next year,” he said.