PT studies new PAC and more housing subsidies

In the discussions for the government plan of the Lula-Alckmin ticket, the PT has designed a program of works along the lines of the old PAC (Growth Acceleration Program). The intention now is to give it an environmental seal.

The PAC was created in 2007, in the second term of then President Luiz Inácio Lula da Silva (PT), to increase public investment, and was one of the flagships of Dilma Rousseff’s first campaign, presented as “the mother of the PAC”. .

The program has put money into large-scale projects such as airports, sanitation systems and the Belo Monte hydroelectric plant — but has also been criticized for delays in schedules and other problems, including environmental ones, in contrast to the party’s current discourse.

The idea that has been outlined by Lula’s campaign should provide for the reissue of a massive investment plan, especially in infrastructure, to be formulated together with mayors and governors.

The reformulation of the PAC being studied by the party seeks to give a more sustainable face to the projects and works of the package to be launched in any new PT government. One of the ideas is to prioritize railways and waterways to reduce the weight of highways in the country’s transport network.

This is in line with the plan by members of Lula’s campaign to sell Brazil as a green power. Members of the program design team say that a new program or brand can even be created with this motto.

According to Pedro Ivo, who represents the Network in the discussions, the intention is to do, like the government of President Joe Biden, in the United States, a restructuring of environmental policies to oppose President Jair Bolsonaro (PL).

For this, the proposal is that the sustainability agenda be transversal and serve as a guideline for structuring policies and projects of an eventual Lula administration.

“This is a directive given by Lula himself since the beginning of the talks”, says Ivo.

The goal of “zero net deforestation” for four years was included in the guidelines, which also proposes to restore areas that have been deforested, and to combat illegal deforestation.

The idea, say PT members, is that looking at the environment and fighting deforestation in the Amazon will increase Brazil’s international projection and place the country at the “center of the global environmental agenda.”

“We think that a new Lula government needs to rebuild a series of public policies that were destroyed and that are important for the population, but we have to think about the future as well”, he tells the Sheet the former minister Miriam Belchior, who participated in the formulation of the PT government plan.

“We also need to see what are the new challenges for Brazil. It’s not just repeating it. We have to go beyond what has already been done, and the ecological transition is one of those elements”, he says.

The PAC represented a change in the performance of the federal administration: public investment, especially in infrastructure, was seen as the engine of economic growth.

However, the program has been criticized over time for problems such as delays, lack of completion of the works, increase in prices during execution, abandonment by construction companies, obstacles to projects in the study or bidding phase and acceleration of public spending. It was at the end of the PT era that the public accounts started to show a deficit, which is pointed out as one of the factors of the economic crisis in the second term of former president Dilma Rousseff (PT).

Lula’s campaign assesses that, in the current scenario, the country will only return to the path of growth if public money is applied in investments, works and also in the social area to reduce inequality and stimulate domestic consumption.

The motto of environmental preservation should even reach sectorial measures, such as the housing program – which should be renamed Minha Casa, Minha Vida (which was within the PAC). The idea is to expand the reuse of water in residential condominiums, sewage treatment and recycling.

In addition to resuming the mark on housing policy, Lula’s campaign also advocates that the program increase spending for the poorest population.

Lula’s allies believe that the Casa Verde e Amarela – President Bolsonaro’s showcase for housing construction – needs to be reformulated to increase subsidies given to the construction of housing for lower-income beneficiaries. The assessment is that, as it stands, Bolsonaro’s program ends up benefiting the middle class.

By extinguishing Minha Casa, Minha Vida, the Bolsonaro government ended the conditions given to track 1 of the former PT brand program. This segment was for families with a gross income of up to R$1,800 per month (amount used in 2020), who could sign contracts with a subsidy of up to 90% of the property value, without interest.

Politically, the priority of the environmental agenda in Lula’s program aims to please allied parties and try to attract the support of former senator Marina Silva (Rede).

Sustainability is on the agenda of foreign investors and is crucial for closing deals with other countries.

“Out of 4 families that do not have a house or housing, 3 are in the income bracket of up to R$ 2,000. There is a huge concentration in this income bracket, which has a small capacity to pay. The only way for these families to have access to housing is to increase the subsidy to match the income they have”, said Belchior.

The president of the CBIC (Brazilian Chamber of the Construction Industry), José Carlos Martins, believes that the return of subsidies to the most needy population is a positive change in the direction of the sector, but defends that the proposal to be designed by the party also presents solutions for existing problems in the former Minha Casa, Minha Vida.

“It is very important to have this focus on the population that, many times, cannot afford to pay for the house. But, in addition to the social side, we have to look at public spending and also at other issues [da versão anterior do programa]such as the quality and location of the projects”, stated Martins.

In Minha Casa, Minha Vida, delinquency among the poorest beneficiaries was considered high despite the favorable conditions for settlement of the contract. The delay in the payment of installments in this segment increased from 2014 to 2021, reaching close to 50% of beneficiaries.

Another problem pointed out in the PT brand program was the delay in completing the works. The Bolsonaro government practically stopped signing new Tier 1 contracts and then applied the funds to the completion of unfinished projects.

Launched in 2020 to give Bolsonaro a fingerprint in the housing area, Casa Verde e Amarela ended the offer of houses with subsidies along the lines of the Minha Casa, Minha Vida Range 1 and has been experiencing financial difficulties.

Last year, the program ran the risk of being paralyzed for lack of funds. Given the increase in costs in the civil construction sector, the program has shown lower results than in previous years.

If re-elected, Bolsonaro wants to review spending ceiling and deepen privatizations

A pre-candidate for reelection, President Jair Bolsonaro has presented proposals for his new government plan in speeches and statements in recent months – but there is still no coordination for the economic area in the electoral campaign.

The project cited by President and Minister Paulo Guedes (Economy) has been along the lines of accelerating privatization, including Petrobras, the country’s largest state-owned company, on the list.

However, there is pressure within the government for a flexibilization of the liberal agenda in an eventual second term.

Bolsonaro has already admitted studies to review the spending ceiling (a rule that prevents federal spending from growing above inflation). The proposal would be to leave some types of expenses without the lock.

Recently, Guedes also defended the advance in the sale of state-owned companies such as Correios, and of assets and properties of the Union. With these resources, the idea is to supply a fund to invest in infrastructure and expand the transfer of income to the poorest.

In the labor area, the promise is still to cut costs. The minister was unable to advance the exemption of the payroll to lower the cost of hiring employees.

Also part of this project is the so-called Green and Yellow Card, which was in the 2018 campaign promise and also provides for less labor charges — but it did not get off the ground due to lack of political support and disagreements on how to compensate for revenue losses.

The economic team’s plans also provide for a tax reform, which came to be sliced ​​by the government, but – even so – there was resistance in Congress.

If Bolsonaro is reelected, there is the idea of ​​trying to approve some proposals, such as the mini-reform of the IR (Income Tax), later this year. The bill was approved by the House and stalled in the Senate.

With the proposal, there would be a reduction in the tax burden of companies, in addition to the resumption of taxation of profits and dividends.

Another recycled proposal is to create a capitalization scheme for Social Security. In this model, each worker makes his own savings.

In addition to the spending cap, Guedes’ liberal agenda has been under pressure to make it more flexible in relation to the size of the public machine. Bolsonaro’s allies want to expand the number of ministries. Bolsonaro has already signaled the recreation of the Ministry of Fisheries and even Industry and Commerce, which was incorporated into the Ministry of Economy in the current government.

What is being studied in Lula’s pre-campaign:

• Reissue of PAC with environmental seal

• Transform Brazil into a green power

• Retake My House, My Life with a subsidy for the poorest

• Prioritize the construction of railways and waterways

• Review the spending ceiling

• stop privatizations

• Resuming Bolsa Família with adjustments that demand more resources

What has been defended in Bolsonaro’s pre-campaign:

• Expand privatizations, including Petrobras

• Review the spending ceiling

• Union real estate sales

• Fund for investments and social spending

• Tax reform

• Green and Yellow Wallet

• Re-creation of ministries