The replacement of Bolsa Família by Auxílio Brasil will cause “social insecurity”, said on Monday (8) economist Manoel Pires, coordinator of the Fiscal Policy Observatory at FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation).
The new income transfer program foresees transfers in the amount of R$ 400 by the end of 2022, the year of elections.
The problem, according to Pires, is that the future of payments is still uncertain, both in the case of re-election of President Jair Bolsonaro (no party) next year, and in the case of an exchange at the Palácio do Planalto.
“In December 2022, if everything goes as the government is planning, you have a meeting with it again, with this dilemma. Beneficiaries may feel that they will no longer be entitled to the benefit. This will cause social insecurity”, reported the researcher .
“We have a program that nobody questions, Bolsa Família. At the same time, everyone criticizes the other programs for being bad, for having to improve. We are trying to change the one that works well.”
The assessment took place during a presentation to journalists on possible ways to finance social protection measures in Brazil.
The meeting was also attended by economist Marcelo Medeiros, professor at UnB (University of Brasília) and visiting professor at Columbia University. Medeiros said he agrees with Pires’ analysis of Brazil Aid.
“We have a restriction on the LRF [Lei de Responsabilidade Fiscal] which goes like this: if you create a new, permanent program, you can only do that by cutting permanent expenses or creating a new source of permanent income”, mentioned Pires.
“What do you consider in the Constitution as a permanent expense? It is an expense that lasts more than two years. What they did was to find a way of not putting themselves in a position of non-compliance with the LRF”, he added.
The Auxílio Brasil project provoked a series of criticisms among analysts, due to uncertainties about financing and possible fiscal risks. The spending cap dribble to fund the measure has created tension in sectors such as the financial market in recent weeks.
On Friday (5), Bolsonaro issued a decree readjusting the classification of families in situations of poverty and extreme poverty for beneficiaries of Bolsa Família, which, from this month, will be called Auxílio Brasil.
The decree alters a previous text, from 2018, and starts to consider as families in a situation of extreme poverty those with monthly per capita income of up to R$ 100 (previously, it was R$ 89); and those with up to R$200 are now considered to be in poverty (previously, it was R$178).
The measure should increase the number of families served by Auxílio Brasil.
As shown by the report of sheet, technicians from the Ministry of Economy had to make decisions related to the program based on uncertain information and amidst doubts about the aid numbers.
On Monday, Pires also recalled that the Brazilian tax system has a regressive bias, because it affects consumption more than income. Consumption taxes end up affecting, in proportionate terms, the poor.
In the economist’s view, “there is room” for the country to eliminate “distortions” and tax income more, thus creating mechanisms for financing social assistance policies.
The demand of the most vulnerable for relief measures became more evident after the arrival of the pandemic, in 2020, indicated Pires.
“A good way to discuss the financing of social security is to eliminate distortions, consolidating a good part of taxation in the Income Tax table.”
Medeiros also defended changes in the tax system to guarantee resources in the social area.
In the professor’s view, another possibility would be the creation of a fund to pay benefits to the most needy.
According to him, the fund would have a countercyclical character, that is, it would serve to make resources available to the social area in periods of crisis. The idea would be to protect the funds for combating difficulties and, thus, encourage the economy to react.
“The problem with the state is not spending. The problem is spending badly. It’s good that the state spends on very good things.”
.
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.
