The government will block another BRL 6.7 billion from the 2022 Budget, the Ministry of Economy said on Friday (22). The contingency should create more restrictions on the public machine less than three months before the elections and is done by the need to comply with the spending ceiling (which prevents the growth of federal expenses above inflation).
President Jair Bolsonaro (PL) earlier complained about the need for a blockade. “It’s hard to work with a budget like that, in plaster,” Bolsonaro told reporters in the morning.
“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”.
The contingency is done amid the growth of expenses with court judgments, salary bonuses and financing for agriculture. These items also motivated the last blockade, made in May.
According to the Ministry of Economy, the total need for blocking in 2022 rose by BRL 2.7 billion between the previous and current report (to BRL 12.7 billion).
According to the ministry, a portion corresponding to R$3.9 billion of the previously blocked total had been reversed and only R$5.9 billion remained frozen until now. To arrive at the need to block BRL 12.7 billion in the year, therefore, it was necessary to freeze BRL 6.7 billion.
Economy members say that the reversal of previous blocks resulted from instruments such as bills and ordinances that made it possible to use the resources to meet the needs of ministries, especially mandatory expenses.
The need for blocking indicated in the bimonthly report of income and expenses is a requirement of the legislation. The Fiscal Responsibility Law (LRF) determines that, if it is verified, at the end of a two-month period, that the revenue may not support the fulfillment of the results goals of the public accounts for the year, the government must limit the commitment and financial transactions.
However, this year’s blocks are not being made to meet the fiscal target, but the limit set after the creation of the constitutional norm of the spending ceiling.
The slack in the fiscal target is felt this year because revenues are expanding, giving the government peace of mind with the result stipulated in the Budget Guidelines Law of 2022 (primary deficit of up to BRL 170.4 billion). In the meantime, the ceiling remains fixed and limiting expenses.
The latest figures show that relief to meet the target continues. This week, the government announced that federal revenue had a real increase of 11% in the first half of this year and reached a record level in the historical series started in 1995, at R$ 1 trillion.
The numbers are observed amid the normalization of activity after the pandemic and the inflationary effect on taxation. The rise was also strongly influenced by the growth in revenue from the fuel sector, under the impact of the increase in oil prices on the international market generated by the War in Ukraine.
In the most recent government report, to be detailed next week, the projection of government revenue in 2022 took a new leap and grew by BRL 59 billion (to BRL 2.2 trillion) even with the tax reductions on fuel.
The expectation of expenses also grew, but less – expansion of R$ 45 billion (to R$ 1.8 trillion). As a result, the government’s projection for the central government’s primary deficit in 2022 decreased by R$6.1 billion (to R$59.3 billion).
The areas to be blocked were not disclosed, which should happen by the end of the month. The previous blockade mainly hit the ministries of Science, Education and Health.
In the case of the Science Ministry, there was a cut of R$ 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 was equivalent to 36% of the ministry’s total.
In Education, the shearing amounted to R$1.6 billion out of a total of R$22.2 billion in discretionary funds (7.2% of the total portfolio). Health, on the other hand, received a cut of R$ 1.2 billion out of a total of R$ 17.4 billion (also 7.2% of the total portfolio).
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
