President criticizes proposals from the government’s economic team to limit real growth in education and health spending to 2.5%
The president Luiz Inácio Lula da Silva (PT) criticized this Saturday (June 15, 2024) proposals studied by the government’s own economic team to limit the real growth in spending on health and education. The Chief Executive says he will not make fiscal adjustments “on top of the poor”.
“I want to anticipate: we are not going to make adjustments for the poor. Thinking that we have to worsen health and worsen education to improve (…) This has been done for 500 years in Brazil. 500 years ago, poor people did not participate in the Budget”said Lula in Carovigno, where he was to follow the G7 agenda, in Italy.
The measure is being analyzed by the Finance and Budget ministries and was published by the media. The real growth of the education and health floors would have the same rule provided for in the fiscal framework, which limits the expansion of spending to real growth at 2.5%.
According to the Power360the alternative is not supported by PT members.
The government has been pressured by Congress to present measures that reduce public spending. Some congressmen claim that the government presents proposals only to “collect” and not “cut” spending.
The health floor is 15% of the government’s RCL (net current revenue), while the education floor is 18% of the RLI (net tax revenue). Both have an increase above other Budget expenses, which are limited to real growth of 2.5%. The Ministry of Finance must face barriers for proposing changes to the floors in an election year.
The Minister of Finance, Fernando Haddadstated on Tuesday (11.jun) that the alternative is “just one of the scenarios discussed”.
In Italy, President Lula, however, defended the head of the government’s economic team and denied that he was weakened in the Executive’s economic management.
“Haddad will never be weakened while I am president of the Republic, because he is my Minister of Finance, chosen by me and maintained by me. If Haddad has a proposal, he will look for me this week and discuss the economy with me”said Lula.
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EXEMPTION
Lula stated that “the same” who criticize government spending and fiscal deficit “approved the exemption for 17 business groups”.
The payroll tax exemption was created in 2011, under the government of former president Dilma Rousseff (PT). The Lula government fought unsuccessful battles to end tax exemptions and thus reduce the deficit.
On Tuesday (June 11), the president of Congress, Rodrigo Pacheco (PSD-MG), announced the return of the MP (Provisional Measure) of compensation (1,227 of 2024) after dissatisfaction from the Legislature and businesspeople.
Lula said that the “problem” of compensation “now it was for businesspeople”.
“They are also the same ones who would have to make compensation to supply the tax relief money and didn’t want to. So I said to Haddad: it’s no longer the government’s problem, it’s their problem now. Now the businesspeople get together, discuss and present a compensation proposal to the Minister of Finance”stated Lula.
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