Minimum wage may have around 2% real gain in 2023, says Wellington Dias

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One of the coordinators of the campaign of ex-president Luiz Inácio Lula da Silva (PT) and quoted to command the Ministry of Finance in a possible PT government, senator-elect Wellington Dias (PT-PI) tells the Sheet that the team is working on a government plan with emergency measures aimed at the most vulnerable in the event of a victory on October 30th.

Among the most immediate initiatives is the readjustment of the minimum wage above inflation, which would be implemented as early as 2023. In addition, the update of the IRPF (Individual Income Tax) exemption range would also be presented in the first year of office —may take effect later, after legal changes.

Dias says that the new rule for correcting the minimum wage must consider the average growth of GDP (Gross Domestic Product) of the previous five years, rescuing the logic used during PT governments of considering the expansion of the economy in the calculation. “There will be an average. It will not be that high, probably around 2% of real gain in 2023”, he details.

He also states that public investments should be more restrained in the first year of government, but growing from then on. The campaign works with medium and long-term measures, with objectives to be achieved by the end of an eventual mandate or by 2035.

Former governor of Piauí, elected four times to the position, Dias believes that Lula, if elected, will have a broad base of support in Congress. Check out the main excerpts from the interview:

Lula and Alckmin’s campaign has been asked to present more details of the government’s plan, under criticism that the signals given so far would be a blank check. What details does the campaign intend to present until the second round? It is natural that various sectors cover two things, a detailed program and who will be the ministers in each area. The common sense of politics says that it is necessary to respect a group of leaders who are integrated during a campaign. It is a respect for the voter itself. A candidate who already nominates the minister shows disrespect, a high shoe, an ‘already won’. So first win the elections. After the elections are won, then they set up a transition team, detail the proposal, each item agreed upon.

The Brazilian people already know that it is a certainty, in President Lula’s program, to take care of the poorest, to take care of those who need it most. But it is also a government that has a special eye on the middle class. There are proposals such as updating the exemption range in the Income Tax table. This here is forking from the income of the middle class approximately 120% of remuneration per year, that is, someone who earns R$ 4,000 [por mês] is losing BRL 4,800 per year due to the lack of this update. So, there is a commitment by President Lula to present a proposal to recover this exemption range, with a view to expanding consumption and the income of the middle class.

Would you consider this as one of the first measures of the new government, right at the beginning of the term? That. It is a measure that passes through the National Congress and will be presented in the first year of the mandate. I don’t know how long it takes [para implementação]because it depends on changes in legislation.

And we have the policy of updating the minimum wage with real gain, that is, in addition to inflation, based on a new policy of readjusting the average of the last five years of GDP growth. The GDP has a period that rises, a period that falls, but in a safe way, the average allows increasing the income at the base of the pyramid. If President Lula’s policy had continued, the minimum wage would have [hoje] a value of approximately 400 dollars. There was now [no governo Bolsonaro] a loss of purchasing power. Brazil is among the ten countries with the strongest economy, and all of them have a policy above 400 dollars. Mostly over 800 dollars. So there’s a plan for the short term, but also for the medium and long term, in the perspective of Brazil reaching a level that other countries with the same economic level have already reached.

Do you have a simulation of how much the minimum wage could go with this rule of the average GDP of the last five years? Today it is at R$ 1,212. We had a decrease added to an increase in GDP, and there will be an average. It won’t be that high, probably around 2% real gain in 2023.

Campaigners say some things would be done in the first six months of the government. Is it right there? We are going to work with emergency measures, probably the first six months, and also more structural, more definitive measures. [Serão medidas] short-term, probably with a look at the first year, medium-term, with a look at the four-year mandate until 2026, and also long-term measures, probably until 2035.

Among the emergency measures is, for example, the proposal to update the income tax exemption ranges, aimed at removing this garrote from the neck of the middle class. It is part of a strategy to increase consumption, increase demand to drive economic growth. The minimum wage is also an emergency measure.

But we have emergencies of emergencies. Hunger is a reality. That’s why Auxílio Brasil will have a format in which R$ 600 is the minimum, but for each child in the family there is an increase. Emergency care for those who need care in the health queues, both due to the pandemic and neglect, due to the lack of planning. Updating vaccination for all diseases in Brazil is an emergency.

One of the great unknowns of the campaign plan is the fiscal rule that would be proposed by the PT in place of the spending cap. Do you already have a consensus on the direction to be followed? President Lula makes it clear: there needs to be a definition of a value for investments. It is better to make a real forecast, plus the amount of investment needed, and from there a plan is made with short-term measures. Yes, expense control. When opening the secret budget, a lot of things there don’t make sense and there will be a cut. We need to make a plan with a view to moving Brazil from a deficit situation to a surplus situation. This is the path we want to reach.

Would the resumption of investments take place in the first year or throughout the term? In the first year, we will certainly have a more moderate investment, but the perspective is for year-on-year growth. We believe, on the one hand, in the need to control public accounts. On the other, a plan to ensure social and economic investment. It is clear that the country will have a special eye for the little ones.

President Lula will dialogue with the entire financial system to have lines of credit aimed at dealing with the indebtedness of the poorest and middle class. That’s why a guarantee fund, which allows lower interest rates.

The BNDES will lend to large companies, to medium ones, yes, but it will have an even greater priority for the self-employed, individual microentrepreneurs and small businesses. It is by supporting entrepreneurs that we generate more jobs, income, and increase consumption. Brazil grew an average of 4%. We want to reach 5.5%.

Former president Lula has already mentioned that he wants a finance minister with a more political profile. You are mentioned in this context as a possible name for minister of the economic area. Has there ever been this conversation? Would you accept an eventual invitation? President Lula, since September last year, when I joined the coordination of the campaign, he never dealt with me, nor with anyone in the coordination or not about the composition of the ministry. And he constantly rebukes any dialogue on this topic and makes it clear that this is a personal position, as he has done in other elections, out of respect for his excellence, the voter and the female voter. Won the elections, he will make that decision.

I personally am very committed, very excited for the term as a senator, to work on the priorities of my Piauí, of the Northeast, of Brazil. Our political field will have a senator as a faithful supporter of the proposal that, God willing, will win on October 30th.

A considerable number of allies of President Jair Bolsonaro won a seat in the Senate this year. If Lula is elected, will the composition of Congress be a challenge to the approval of the new government’s measures? I think there’s a mistake when you do [a leitura] by party acronyms. If we look at Brazil as it should be looked at, between the democratic field and the authoritarian field. From this perspective, the National Congress, elected governors, the Chamber of Deputies and the Senate have a much broader composition. In my view, we will have a group of leaders who are in the União Brasil, in the Republicans, in the Progressive Party, as well as in the MDB, PSDB, PSD, who are defenders of democracy and are committed to the country.

When I do the math, I find between 350, 370 parliamentarians in the Chamber who have this thought. I find in the Senate, among those elected, 20 who have this thought, a commitment to democracy, to the various areas.

only 20? We have another 25, 30 of those who are already senators, who have already campaigned with Lula, Alckmin. So we can safely have 45, 50 members of the Senate. It is possible to govern Brazil without this take it, give it here, without that knife in the throat that some have become accustomed to, without accepting to be held hostage by anyone.

Do you believe that the STF should overturn the secret budget? Strictly speaking, in presidentialism, it is the President of the Republic who has the mission of presenting the plan and executing it. A contingency budget exception is made, and Parliament can add a new item if agreed with the Executive. My fear is that this dangerous secret budget decision — in my view illegal, unconstitutional — could damage this relationship.

I argue that the good thing is that the Executive, in agreement with the Legislature, returns to the axis. Because if the judgment is taken literally, it is possible that any form of interference by the Legislative in the Executive’s Budget may be considered unconstitutional, just as the Executive cannot interfere in the budget of the Legislative or the Judiciary. See, if the Legislature can interfere in the Executive’s Budget, why can’t it also in the Judiciary?

In other words, in your opinion, is it better for Congress to enter into a dialogue to reach a common denominator than to risk losing all the amendments, not just the rapporteur? That’s exactly it.


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Wellington Dias, 60 years old

Born in Oeiras (PI), he holds a degree in Literature from the Federal University of Piauí and a specialization in public policy from the Federal University of Rio de Janeiro. He began his political career as a councilor in Teresina in 1993. He was elected state deputy in 1995 and federal deputy in 1999. He was elected governor of Piauí four times, each time in the first round, exercising his mandates between 2003 and 2010, then between 2015 and 2022. He was also a senator between 2011 and 2014, a position for which he was elected again this year.


View candidate proposals

Minimum wage

In advertising material, the campaign promised readjustments above inflation for the minimum wage. Valuation policy would recover the population’s purchasing power and is considered essential to boost the economy

Government plan does not include this item (Bolsonaro only proposed a real increase in 2019; later, adjustments only for inflation)

Brazil aid

It promises another R$150 per child up to six years old (in addition to the minimum of R$600 per household). The program foresees recovering characteristics of Bolsa Família and expanding the guarantee of citizenship for the most vulnerable. The objective is to advance in stages towards a universal system with a basic citizen’s income

Maintenance of the value of R$ 600, with an extra R$ 200 for those who start working (which has been provided for by law since 2021, but has never been regulated by the Bolsonaro government). The president promised after the first round a 13th of Auxílio Brasil for female-headed households for 2023

IR table correction

Income Tax Exemption for workers who earn up to five minimum wages. It also proposes reform that simplifies taxes and makes the poor pay less and the rich more. It promises to combat tax evasion, simplify taxes, reduce consumption taxation, and tax relief on products with higher added value

Exemption from income tax for workers who earn up to five minimum wages. It also advocates tax reduction and simplification

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