01/10/2024 – 20:52
The government of President Luiz Inácio Lula da Silva (PT) increased the freeze on spending on health and education and released money from ministries with more works under the Growth Acceleration Program (New PAC), according to the decree signed this Monday, 30 .
The decree details the Executive’s spending containment carried out on the 20th. In July, the government froze R$15 billion in Budget expenses. The Farmácia Popular, Auxílio Gás and highway concession programs were the most affected. Now, as the economic team announced the release of R$1.7 billion in expenses, the treasury fell to R$13.3 billion, but the distribution of the cut between ministries has changed.
Two months ago, the amount was divided between blocking, carried out to comply with the fiscal framework, and contingency, applied to meet the primary result target (read more below). The two measures have the same practical effect: freezing the payment of that resource in the Budget. Now, the blockade has increased by 2.1 billion and the contingency has been undone, which has resulted in some bodies “winning” and others “losing” resources that they can spend.
The Ministry of Health had a total containment of R$4.4 billion in expenses and the blockade increased to R$4.5 billion. The folder is the body with the highest frozen value in the entire Esplanada dos Ministérios. The Ministry of Education, in turn, had R$1.3 billion frozen and now has R$1.4 billion that it will not be able to spend, in rounded figures.
The Ministries of Cities remains the second most affected department, but the total cut fell from R$2.1 billion to R$1.8 billion. At the Ministry of Transport, the treasury decreased from R$1.5 billion to R$986 million. See the list by agency:
“The distribution by agency was guided by the continuity of public policies to serve the population and the federal government’s commitment to the fiscal result target established for the year 2024,” stated the Ministry of Planning and Budget when releasing the details.
The money can only be released if the accounts are up to date, which is not the current scenario, as the blockage has increased due to the growth in mandatory expenses, such as pensions and social security benefits, programs that the Executive Branch cannot fail to comply with. . Ministries will still choose which programs and political policies will be affected by the additional lockdown.
The government released a total of R$1.75 billion compared to what was previously frozen. Adding up all ministries, there was a release of R$827 million for the PAC. In expenses under the control of the ministries, there was a relief of R$647 million.
The Lula government also authorized the release of R$274 million in parliamentary amendments, including bench amendments and committee amendments, which, despite the decree, remain suspended by the Federal Supreme Court (STF).
What is the difference between blocking and contingency?
In contingency, the government freezes expenses when revenue is frustrated, in order to meet the fiscal target (balance between revenue and expenses, not counting interest on debt). For this year and for 2025, the goal is to eliminate the deficit in public accounts.
As the target has a band (tolerance interval) of 0.25 percentage points of GDP up and down, the government meets the target as long as it does not exceed the band floor – that is, a deficit of R$28.8 billion.
The blocking is carried out to comply with the expenditure limit of the fiscal framework. Thus, when there is an increase in mandatory expenses (such as pensions, for example), the government blocks non-mandatory expenses (such as funding and investments) to compensate.
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