Bolsonaro says that precatories and allowance will be cut in the budget, which could reach R$ 8 billion

President Jair Bolsonaro (PL) said this Friday (22) that the new budget cut could reach R$ 8 billion, with allowance and precatories.

The president’s forecast is higher than the initial expectation of members of the Ministry of Economy, who spoke of R$ 5 billion. The government needs to contingency resources from the 2022 Budget in order not to breach the constitutional rule of the spending ceiling.

“It’s hard to work with a budget like that, in a cast. We have this extra cut [que pode ser que] reach almost R$8 billion,” Bolsonaro told reporters this morning.

“That’s where the issue of precatories comes in, there’s the allowance, there’s the issue of financing for agriculture as well,” he added.

The deadline for the government to publish the blockade is this Friday. The numbers must be announced through the income and expenditure report, which the government must publish bimonthly, and the areas to be cut must only be detailed later.

Despite citing expenses such as allowance and precatories, the Chief Executive did not detail which areas should be contingency.

“When something arrives that goes beyond what was expected, I have to cut it. Where are you going to cut it? If it cuts education, it complains. If it cuts health, it complains”, said the president.

“Everyone will have a complaint, it’s natural. I’m obliged to comply with the legislation”.

Although the report normally expresses the need for blocking to meet the fiscal target (result of income minus expenses), this year the difficulty is only on the expenditure side with the possible blowout of the ceiling.

Currently, about R$ 10 billion are already allocated in the Budget, considering the reserve of R$ 1.7 billion for readjustments and restructuring.

The most recent blockade, detailed in June, mainly hit the ministries of Science, Education and Health.

In the case of the Science Ministry, there was a cut of R$ 2.5 billion from the R$ 6.8 billion previously foreseen in the so-called discretionary funds (which the government can postpone, unlike the mandatory ones). The scissor is equivalent to 36% of the total.

In Education, the scissor was R$ 1.6 billion out of a total of R$ 22.2 billion in discretionary (7.2% of the total). Health, on the other hand, received a cut of R$ 1.2 billion out of a total of R$ 17.4 billion (also 7.2% of the total).

The ministries of Defense (equivalent to 6.2% of discretionary), Tourism (5.6%), Communications (5.6%) and Foreign Affairs (5.6%) also underwent cuts. Also on the list are the Presidency of the Republic (5.65%) and the Central Bank (5.6%). Rounding out the list are Justice (4.2%), Regional Development (3.8%), Women (3.7%), Mines and Energy (3.4%), Infrastructure (2.6%) and Citizenship (2.1%).

Bolsonaro’s statements this morning came during a visit to a gas station in the federal capital. Although the place is known in Brasília for having motivated the beginning of Operation Lava Jato, for being used as a meeting point for paying bribes, the president went to inspect and celebrate the reduction in fuel prices.

Petrobras announced, last Tuesday (19), a 4.9% reduction in the average sale price of gasoline by its refineries. From this Wednesday, the liter of fuel will be sold, on average, for R$ 3.86, a cut of R$ 0.20.

The president said that, with the new formation of the company, with the changes made by him in charge of the company, it should fall again.

“I think with the old board [da Petrobras] we would not expect to decrease these R$0.20 and this R$0.20 makes a difference. I haven’t seen Brent’s barrel as it is today. Yesterday it was about 100 dollars… If it drops a little more, I won’t say it will, but Petrobras will certainly review the price down”, he said.

He was accompanied by the Minister of Mines and Energy, Adolfo Sachsida, and Augusto Heleno, from the GSI.