Doria’s coordinator, Meirelles wants the original roof back and sell Petrobras

Main coordinator of the government plan of pre-candidate for President João Doria (PSDB-SP), former Finance Minister Henrique Meirelles says that the reestablishment of the original spending ceiling will be a priority if the toucan is elected.

Administrative and tax reforms and the privatization of Petrobras in blocks will also be pursued.
Meirelles, 76, believes the economy will grow quickly again if the original ceiling is re-established and confidence is restored.

“Look at the example of 2016. Brazil had fallen 5.2% from June 2015 to May 2016. We approved the ceiling and, in the following year, we grew between the last quarter of 2016 and the last quarter of 2017 by 2.2%. That was the effect of the ceiling. The reaction is immediate,” he says.

“The moment these ceiling violations started to be discussed, the economy immediately took a turn for the worse.”
Before the approval of the PEC (proposed amendment to the Constitution) of the Precatório, the correction of the ceiling occurred in July, since, in August, the government has to send the budget forecast for the following year. Now, with the correction in December, the Budget is closed with doubts about how much can be spent in the following year.

The PEC also limited the payment of court orders, pushing forward billions in amounts in legal debts that one day will have to be paid, which creates insecurity.

What would be the fundamental points in the search for fiscal consolidation from 2023 on? Would there be an adjustment in the civil service, a cut in tax subsidies of more than R$ 300 billion to sectors and companies? What’s the plan? First, it is necessary to re-establish, in its entirety, the spending ceiling. With another proposal for a constitutional amendment canceling this PEC [dos Precatórios], which only creates distortions.

With the reestablishment of the ceiling, priorities begin to be defined, which was exactly the main purpose of the spending ceiling: to encourage the definition of priorities. Otherwise, any expense is a priority, which is the situation Brazil was experiencing before the ceiling.

When it was established in 2016, the ceiling led to increased confidence and growth.
This exactly shows its positive impact. From there, we have to work on fiscal consolidation.

We have a very big advantage because we can talk far beyond theory and plans. We have this applied in São Paulo. We carried out an administrative reform and a social security reform, much stronger than in other states.

Thus, we have here an additional revenue generation this year of R$ 50 billion, which will be used in social and infrastructure projects. There are 8,000 works that are starting to be executed.

First, the State needs to be restructured to make it more efficient and reduce costs.
Second, the area of ​​tax incentives. This was done in São Paulo. We closed five state companies that no longer had any reason to exist, we cut benefits and privileges, we rationalized the cost and structure of the state.

All tax benefits granted were reduced by 20%. The state generated resources to invest and became more efficient. It is something that can be done and will certainly be part of the plan.

In the tax area, would a new tax be needed to increase revenue to complement the fiscal adjustment? No. The tax burden in Brazil is already equivalent to that of northern European countries, without having the public service they offer. There is no more room in Brazil to increase the tax burden. But [há espaço] to increase the efficiency of the State, of the availability of resources for investments through administrative reform.

Then, other measures, [como] privatization and concession of infrastructure to the private sector. We have the example of the 1,273 km Piracicaba-Panorama road, with planned private investments of nearly R$ 14 billion. And it also generated R$ 1 billion for the state in grants paid by the winning consortium.

we have the concession [em andamento] from parks to coastal roads, ferries, 22 regional airports. All of this improves the quality of service to the population and collects for the state.

In the tax area, what would be the plan? Mr. is sympathetic to Bernard Appy’s proposal [do Centro de Cidadania Fiscal e um dos idealizadores da reforma tributária contida na PEC 45]? I worked together with the other states and we reached a unanimous agreement for the first time in 30 years among the 27 states. Based on the proposal of PEC 45, we present a substitute there, improving a little the question of how to compensate producer states in the first years for the change of taxation at destination, instead of at origin.

This replacement for PEC 45 has already been presented in the National Congress with the unanimous support of the states. This is critical. In addition, this proposal makes possible a great rationalization in the payment of taxes and increases productivity in the country.

Profits and dividends, would the proposal for taxation come back? It will be something to be discussed within the economic group. I won’t get ahead of myself now.

What is the assessment of the situation of disarray of public accounts? Mr. Do you think that by restoring the ceiling and a little confidence, the economy will react quickly? Have no doubt. Look at the example of 2016. Brazil had fallen 5.2% from June 2015 to May 2016. We approved the ceiling and, in the following year, we grew, between the last quarter of 2016 and the last quarter of 2017, by 2.2% . That was a ceiling effect. The reaction is immediate. It was a ceiling effect.

The moment these ceiling violations began to be discussed, the economy immediately took a turn for the worse. For Brazil’s biggest problem in recent years has been unsustainable fiscal expansion. By attacking this, the economy quickly returns. Furthermore, [temos de fazer] administrative, tax reform, etc. The answer is very quick.

The Temer and Bolsonaro governments touched some infra-constitutional changes or changes that underwent changes in the Constitution, such as new regulatory frameworks for gas and sanitation, autonomy from the Central Bank. What else can you do on this line? There are a series of measures in this direction aimed at better functioning of the economy and productivity. Usually, in what I like to call “ease of production”, there are several measures. How to start a business; something we did in São Paulo.

In Brazil, in 2016, it took an average of 101 days to start a business. Today, in São Paulo, a company opens in an hour. This kind of thing can be taken all over Brazil.

Another thing is tax digitization, different from tax reform. Digitization of procedures, simplification of rules and things we are doing in São Paulo, which increase productivity.

But there is no doubt that, to start all of this, we have to talk about administrative reform, tax and investment in infrastructure. Then, improving the business environment, and a very important part in the short and medium term, which is the issue of education and training. There is a huge scope for achieving increased productivity from workforce training.

I always like to quote the saying that the long term takes time, but enough. At this point, there is an improvement in teaching. Again, this is being done successfully in São Paulo, which had seventh place in the overall standings and is now ranked first.

At Petrobras, would there be a change in the pricing policy or privatization plan? I don’t know what will be decided by our group. In my personal opinion, what will need to be done is the privatization of Petrobras, with the division of the company in more than one, with competition for prices to prevail. [dos combustíveis] fall down. And not with government interference.

Doing something like it was done in the US telephony or Standard Oil’s monopoly [norte-americana] a century ago.

With the current cycle of rising interest rates to fight inflation, lower growth is expected in 2022, which should worsen the membership. The Bolsonaro government has revamped the Bolsa Família and increased the value to R$ 400, on average, with a deadline to finish, in this amount, at the end of 2022. What will be done in this area? This will be part of our group’s work. But the best social program there is is job creation. This year, we have already created more than 800 thousand jobs in São Paulo and we should reach close to 1 million. São Paulo has 22% of the population and is creating 40% of all new jobs in the country. This is the biggest and best social program out there.

There are, of course, other programs that we are implementing in São Paulo, such as the Free Lunch and the Bolsa do Povo.

Electoral polls show a crystallization of Lula and Bolsonaro’s favoritism in 2022 [47% e 21% das intenções de votos no primeiro turno, respectivamente, segundo o Datafolha]. What are the chances of the third way? Survey a year before the election reflects a name recognition. One is the current president of the Republic and the other is the former president. The voter at this moment is thinking about the economic problem, about inflation, about the prices of meat and bread. He will start thinking about an election in May.

At that moment the third way will be able to take off. Mainly João Doria. In 2018, the election was very much based on a rejection of the political class, which ended up turning into a rejection of any administrative experience. The rest is history. The effect is bad and the population is feeling it now.

My assessment is that, in the next election, the population will look at the management much more. What the person has already accomplished and what he can accomplish. João Doria has what to show in São Paulo. It will not speak in theory. In 2018 I just got there and screamed. Now, it will have to show concrete and accomplished work.

In an eventual Lula government, Mr. would you go back to work with him? This is premature. The fact is that I’m working with Doria, who is running against Lula.

X-ray – Henrique Meirelles, 76

Current Secretary of Finance and Planning of the State of São Paulo. He was international president of BankBoston, president of the Central Bank throughout the Lula administration (2003-2010) and finance minister in the Michel Temer administration (2016-2018). He was a presidential candidate by the MDB in 2018 and intends to run for the Senate in Goiás by the PSD.