Opinion – Nelson Barbosa: Did the manager go crazy or desperate?

Imagine a building with a bad trustee, an incompetent person who doesn’t like to work and against whom there are suspicions of taking advantage of the condominium contracts to enrich family and friends.

The election for trustee is approaching, and everything indicates that the vagrant trustee will lose. The new síndico is also expected to open the black box of the property administration, which has evolved from reckless to bizarre.

In desperation, the manager about to be dismissed and investigated has an idea: “Vote for me, because I’m going to wipe out the condominium for six months!”.

Excited, the braggart goes further: “Vote for me because you won’t have to pay the IPTU either, but rest assured that the city hall will receive the money, because I will compensate the municipal coffers for the unpaid slips”.

When asked how he will pay for the kindnesses, the land management myth says: “Spending the building’s reserve fund or indebting all the residents to the bank, at a high interest rate.”

And how does the condo captain plan to rebalance the budget once elected? Announcing that he will charge condominium fees again and that he will break the floor of life for all residents, cutting basic services and selling the building’s assets to those who do not live in the place.

Sound crazy? It’s crazy. But it is also more or less what the Bolsonaro government announced this week.

Desperate with the risk of shortages or a new big increase in the price of fuel, the federal government announced that it will zero its taxes for six months.

As most federal taxes were already cut at the beginning of the year (federal rates on diesel and cooking gas have already been zeroed), the new federal exemption will have little impact on the final price.

To make matters worse, as the lag of internal prices in relation to external quotations is large, a new exemption will not compensate for a new internal mega-adjustment to the international parity, if and when Petrobras decides to do so.

In view of the above limitation, in order to increase the tax exemption, the federal government promised to compensate the states that zero ICMS, with more debt issuance by the Union, to be paid via fiscal superrock, but only from January onwards, so as not to harm the Bolsonaro’s electoral campaign.

The details of the operation are still unclear, but it is not difficult to pinpoint the problems. Preliminary estimates indicate that the government will spend R$50 billion in six months to make gasoline and diesel cheaper.

That the government has to do something is kind of obvious to everyone who doesn’t participate in the coaching sessions of the “we are free and clueless” movement, those people who think they have the right economic policy, but that the people don’t recognize.

On the realistic side, the question is how much and how the government should act, that is, the size of the subsidy and who will pay. Toasting R$50 billion to hold down gasoline prices is an exaggeration in a country where many things are lacking. The ideal is a lower value, just for diesel, as has been done in the past.

More importantly, the funding must come from those who have gained the most from rising prices, the companies that produce fuel, via a temporary increase in taxation on oil profits. This is what some European countries have just done.

And it is necessary to recognize that, whether general or focused, temporary subsidy does not solve a structural problem: the government must prepare the Brazilian economy to deal with fuel price volatility, as has already been done with the exchange rate, by the PT government, Lula and Dilma , but the space ran out. I’ll come back to the topic next week.