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Tuesday, November 29, 2022
HomeEconomyLula and Bolsonaro's promises generate an extra cost of at least BRL...

Lula and Bolsonaro’s promises generate an extra cost of at least BRL 84 billion in 2023

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The electoral promises made by Luiz Inácio Lula da Silva (PT) and Jair Bolsonaro (PL) will demand, if implemented, at least R$84.3 billion extra from the National Treasury in 2023, among measures that increase expenses or reduce revenues.

The estimate was made by Sheet considering only promises made by candidates that are not yet included in the 2023 PLOA (Annual Budget Bill), sent by Bolsonaro to Congress in August with a series of underestimated expenses.

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Included in the account, for example, are the approximately R$ 50 billion additional to fulfill the promise (made by both) to maintain the minimum amount of Auxílio Brasil at R$ 600 per family. The proposal sent by Bolsonaro to parliamentarians less than two months ago is just enough to guarantee an average value of R$405.

On the other hand, measures that already have values ​​reserved in the budget proposal were left out of the survey. One of them is the fuel subsidies, promised by the current president for next year and whose resignation of R$ 52.9 billion is already foreseen in the PLOA.

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Not all the calculated value necessarily represents a deepening of the deficit in 2023, currently forecast at R$ 63.7 billion, because the campaigns have avoided revealing their entire action plan. It is possible that some measures are offset by cuts in other expenses or increases in revenues, smoothing the impact.

The numbers of Lula and Bolsonaro indicate a difference in the size of the invoices. The measures signaled by the current president represent an extra cost of at least R$84.3 billion, while the PT’s initiatives should cost at least R$119.9 billion. It is not possible to compare the two directly, however, because Lula’s campaign has expanded the detail of its proposals in recent weeks, which brings more numbers to its list.

An example of this is the interview with Sheet of the elected senator Wellington Dias (PT-PI), quoted to command the economic area in an eventual Lula government. he stated that the idea is to readjust the minimum wage based on the average GDP growth of the last five years — which would result in a real gain of 1.3% next year, although a percentage of 2% is also being evaluated.

Each 1% readjustment in the minimum wage represents an impact of R$5 billion in the year, or R$3 billion from May 1st (date considered by PT to implement the increase).

Bolsonaro, in turn, promised a real increase to the minimum wage in 2023 last Thursday (20) – after repercussions of a plan by Minister Paulo Guedes (Economy) revealed by the Ministry of Economy. Sheet to take away the past inflationary correction guaranteed today by the Constitution.

Despite the promise of the real adjustment, reinforced by Bolsonaro in a video on social networks on Friday (21), the government did not say how much this increase would be or what parameter will be used – which prevents detailed estimates (and reduces the bill for the promises of the president). The 2023 Budget proposal sent by the president does not include earnings above inflation for the fourth year in a row.

The two campaigns also launched additional pledges for Auxílio Brasil. Lula wants to pay an additional benefit of R$150 for each child up to 6 years old who is in the program.

According to former Minister of Social Development Tereza Campello, the additional cost would be approximately R$16 billion, to be made possible in a second phase. The immediate priority is to ensure the minimum amount of R$ 600 per family. “This is not a trivial issue, as it is not provided for in the Budget,” she says.

Bolsonaro, in turn, targets the female audience and promises a 13th for beneficiary families headed by women. According to calculations by Guedes’ team, the cost would be R$ 11 billion.

There are other policies in play that can change the account. PT talks about resuming investments, including the Minha Casa, Minha Vida housing program, recomposing resources from programs such as Farmácia Popular and creating a guarantee fund with R$7 billion to R$18 billion to help indebted families to renegotiate their debts and recover consumption capacity.

The PT campaign also calculates, in a preliminary way, a need of R$ 10 billion to reduce queues at SUS (Sistema Único de Saúde) and launch a broad vaccination campaign in early 2023. “We have a short-term policy and a structuring strategy, but this is the priority allocation of resources”, says former Health Minister Arthur Chioro, one of the PT’s policy makers for the area.

According to him, the idea is to redirect the R$ 10 billion that are currently reserved in the Budget for the so-called rapporteur’s amendments (used for parliamentarians allied with the government to send resources to projects of interest). This would avoid an additional invoice because of these measures.

“We will not hesitate, these amendments are an excrescence”, says Chioro. “We will repurpose the amendments, these are two issues that cannot wait.”

Bolsonaro’s campaign has avoided going into detail about the costs of the measures. In Guedes’ team, there is talk of an extra impact of around R$ 100 billion in expenses alone, but the details are kept under lock and key by the technicians.

The minister’s idea was to try to escape the need for a “waiver” and accommodate everything within the ceiling with measures to “break the floor”, that is, to stop the growth of mandatory expenses – hence the proposal to change the minimum wage and of pensions. The bad repercussion of the plan, however, ended up making this path difficult and even generated an extra promise, that of a real readjustment of the floor and the benefits of the INSS.

The size of the bill of promises is closely monitored by the financial market, which fears an exaggerated fiscal expansion starting next year and a consequent explosive trajectory of public debt over the next few years.

There is already a consensus in the market that there is a high chance that the government will have to ask for a license to spend next year outside fiscal rules, such as the spending ceiling – which limits the growth of federal spending to the variation of inflation.

From the moment we ignore that we have work to do within the Budget, we allow expenses to continue existing as if they were meritorious. Like the secret budget

Juliana Damasceno, senior economist at Tendências Consultoria, says that the account for 2023 is important to signal the size of the fiscal expansion planned for the future, since the extra spending is unlikely to be temporary.

“Of course, what goes into the waiver also counts, because if you give something in 2023, it’s hard to go back. And once it becomes permanent, it’s a problem for future Budgets,” he says.

Despite this, she considers it more relevant to analyze the fiscal scenario in a broad way, not just focused on next year’s bill. “It won’t make much difference if it’s going to be BRL 80 billion or BRL 100 billion, but the way it’s going to be done and whether it’s going to be accompanied by a minimally credible rule [para substituir o teto de gastos]”, he says.

For her, the ideal would be for the government to review existing expenditures in the Budget today to compensate for the expansion of expenditures. “At no time do I see in these discussions reviewing expenses that are within the ceiling. Not to take away [do teto]but to cut”, she says. She cites as a possibility of reviewing social benefits paid in an overlapping way, such as BPC (Continued Benefit, paid to people with disabilities and low-income elderly) and Auxílio Brasil.

“From the moment we ignore that we have work to do within the Budget, we allow expenses to continue existing as if they were meritorious. Like the secret budget”, he says, referring to the rapporteur’s amendments.

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