Government asks Petrobras, Caixa, BB and BNDES to advance dividends to fund aid

Faced with extraordinary expenses with the approval of the PEC that boosts social benefits and the exemption of federal taxes on gasoline and ethanol, the government sent a letter to the four main state-owned companies –Petrobras, BNDES, Banco do Brasil and Caixa Econômica– requesting changes in their policy. payment of dividends to the Treasury in search of extraordinary income.

According to the special secretary of the Treasury and Budget of the Ministry of Economy, Esteves Colnago, the government questioned whether companies are able to increase the transfer to shareholders, approaching 60% of profit, and change the frequency of payment, from half-yearly. to quarterly.

“We sent a general letter to ask what they can pay in dividends, without jeopardizing Basel’s investment policy and requirements,” he said.

Colnago considered that Petrobras already makes quarterly payments, but that the letter was not customized for each company. According to the secretary, Banco do Brasil responded by saying that it would not be possible to respond to the government’s request, while the other state-owned companies have not yet commented.

The total estimated cost of the PEC in the billions is R$41.25 billion, while the reduction of federal taxes on fuel will cost R$16.51 billion. So far, the government has received R$ 18.8 billion from the BNDES, referring to profits obtained in 2020 and 2021, in addition to the R$ 26 billion obtained with the privatization of Eletrobras.

“The expenses part has already been borne, but we would like the revenue index to also be borne with extraordinary revenue,” said Colnago. “Exceptional obligations were created, we also pay with exceptional income”, he added.

These extraordinary revenues with the possible anticipation of the payment of dividends are not included in the Ministry of Economy’s estimate that the central government will end 2022 with a fiscal surplus – the first in eight years – or with a deficit close to zero.

“We are heading towards reaching the end of the year with a very low deficit, close to zero, or with a surplus. It would be the first fiscal surplus after 8 years”, said Colnago at a press conference to detail the report evaluating expenses and revenues for to the third quarter of 2022.

“The expectation that is consolidating is that at the end of the year we will have a surplus, albeit small, for the central government”, he added.

The central government brings together the accounts of the National Treasury, Social Security and the Central Bank.

Last Friday (22), the Ministry of Economy announced that the projection for the central government’s primary deficit (which does not consider interest expenses) in 2022 decreased by R$ 6.1 billion from the previous report to the current one – from BRL 65.5 billion to BRL 59.35 billion.

As for the R$6.7 billion blockade of the 2022 Budget to meet the spending ceiling, which prevents the growth of federal expenditures above inflation, the Secretary of the Treasury and Budget said, without giving details, that the Ministries of Health and of Education will be among the areas that will be affected.

“It is natural that there were contingencies in these ministries, such as Health and Education, their budget is very large. It is natural that there are in these bodies, it is not a lack of criteria”, he said.

With the release of R$ 2.5 billion from the FNDCT (National Fund for Scientific and Technological Development), Colnago recognized that there will be a greater demand for budgetary blocking in other portfolios.

According to the report by the Ministry of Economy, the total need for blocking this year rose by BRL 2.77 billion, from BRL 9.96 billion to BRL 12.74 billion.

The contingency is done amid the growth of expenses with court judgments, salary bonuses and financing for agriculture.

Colnago also said on Monday that the PLOA (Budget Proposal) for 2023, which must be sent by the government to Congress by August 31, should provide for the payment of Auxílio Brasil of R$400, instead of the boosted benefit of R$600 estimated until the end of the year.

“We have a legal framework and the obligation of the legal framework is an aid of R$ 400. I don’t think we will have a change of legal framework until the PLOA. I think the PLOA should come with R$ 400”, he said.

If the BRL 600 Brazil Aid becomes permanent in 2023, as President Jair Bolsonaro (PL) has promised, the Secretary of the Treasury and Budget estimates an additional fiscal impact of between BRL 50 billion and BRL 60 billion.

As this amount has to fit within the spending ceiling, the government would be forced to cut discretionary expenses, that is, non-compulsory expenses. According to Colnago, it would be a challenge and the stagnation of the budget harms the various Powers.

“The latest discretionary [não obrigatórias] were at BRL 120 billion, BRL 130 billion [ao ano]. By creating a set of mandatory items that add up to R$50 billion, R$60 billion, our discretionary volume will drop to R$70 billion, which would be very difficult throughout the year,” said Colnago.

“Around R$70 low [bilhões de despesas discricionárias]maybe we can survive, the ministries would have difficulty, but they could keep the minimum of policies”, he added.