Tebet’s brief was sidelined in decision on court orders – 09/27/2023 – Market

The Ministry of Planning and Budget, commanded by Simone Tebet, was left wondering how to resolve the precatório bomb, according to different government interlocutors interviewed by the Sheet.

The department’s legal department was informed of the negotiations, but there was no official opinion from the body on the matter. The SOF (Federal Budget Secretariat) also did not endorse the technical note prepared by the National Treasury and the PGFN (Attorney General of the National Treasury) to support the claims of the AGU (Attorney General of the Union).

One of the versions is that SOF was even willing to sign the document, but wanted to obtain an opinion from its own areas first, and there was not enough time to do so.

Internally, however, there are reports of warnings and resistance to the solution proposed by the Treasury, which involves re-discussing the accounting nature of expenses with court orders.

In this context, experienced technicians within the government point out that the abstention of the Federal Budget Secretariat in the document is symbolic. One wing even privately acknowledges that Planning was left behind in the discussions.

At the Treasury, the discourse is that Tebet’s department supports the solution and the request filed with the STF (Supreme Federal Court), and SOF did not sign the technical note because “it was not necessary”.

The report sought out the Ministry of Planning to obtain information about the department’s participation in the negotiations and to find out why SOF did not sign the joint technical note, as was expected. The department did not respond at the time of publication of this text.

This Monday (25), the AGU requested the overturning of the limit for court orders established under the government of Jair Bolsonaro (PL) and proposed the payment of part of the court sentences as a financial expense, without compromising tax rules.

The government of Luiz Inácio Lula da Silva (PT) is also asking for authorization to pay off the stock held up until now through extraordinary credit, which is also outside the reach of budget limits. The liability is estimated at around R$95 billion, and its regularization should increase the public debt.

The position of the legal body seeks to pave the way for Minister Fernando Haddad’s (Finance) strategy of “de-pedaling” precatório before 2027, when the end of the ceiling for payment of these debts could detonate a fiscal bomb exceeding R$ 250 billion, in numbers updated by the government.

The government’s plan to classify part of the spending on court orders as financial expenses was anticipated by Sheet In August.

At the time, Minister Simone Tebet made public statements signaling divergences in relation to the path intended by the Treasury.

“I don’t know what’s brewing there [na Fazenda], this is a topic that we haven’t been able to sit down to discuss yet, the teams always sit down to discuss. But we are preparing something different from this issue of placing financial expenses. In our ministry, this is not the case,” said Tebet on August 15.

“There are alternatives, healthy alternatives, possible alternatives, more flexible alternatives, that guarantee legal security, that do not generate instability or any type of questioning in relation to Brazilian debt nor this issue of gambling [a despesa] necessarily outside the framework”, added the minister at the time. The Planning proposal, however, was never made public.

A Sheet also found that the solution presented to the STF did not go through the Judicial Tax Risk Monitoring and Monitoring Council, a body created by Lula’s decree on January 12 of this year and in which Tebet has a fixed seat.

The collegiate was established to deal with problems linked to sentences and court orders. In addition to Tebet, the other members are Haddad and the AGU minister, Jorge Messias. The two were directly involved in the negotiations, but the issue was not submitted to the Council.

Among the collegiate’s responsibilities is proposing strategies to improve governance over the Union’s judicial fiscal risks and identifying and proposing updates in relation to procedures for recognizing, measuring and disclosing contingent liabilities arising from legal demands.

Planning representatives were also left out of the meeting with STF minister Luiz Fux, who is the rapporteur for the ADI (direct unconstitutionality action) on court orders.

The meeting took place last Wednesday (20) in the White Room of the STF, a space intended for ceremonies, and was attended by minister Jorge Messias, other members of the AGU, the secretary of the National Treasury, Rogério Ceron, and the prosecutor -general of the National Treasury, Anelize de Almeida.

According to reports, the government presented the general lines of the proposal that would be formalized on Monday. The Executive is optimistic about the chances of obtaining approval from the Supreme Court for the requested changes, although it is at the same time cautious, since it is difficult to predict how each minister will position themselves in relation to the issue.

Moments before the petition was filed, Tebet made a statement, at an event in São Paulo, that the government intended to resolve the problem of court orders “by the year 2025”.

“The news that I can tell you, I don’t know if Minister Haddad has already spoken about this in the morning, is that we don’t want to wait until 2026, which is the deadline to return to paying 100%, we are seeing to what extent we can resolve this problem, at most, until the year 2025”, he said at an economics forum coordinated by the Center for New Development Studies at FGV (Fundação Getulio Vargas).

As already shown by Sheetthe relationship between Haddad and Tebet is marked by an alignment that clashes with the history of friction between holders of the two portfolios, but the apparent harmony covers up episodes in the relationship in which she was isolated, was little heard or did not explore her full voice potential when had the chance — reinforcing the Finance Minister’s leading role in the discussions.

Some of her assistants even advocate for the minister’s greater participation in issues, but see in her conduct a preference for not running over or clashing with Haddad.

Douglas Gavras collaborated