Ministry of Finance questions whether the health and education floor, guaranteed in the new fiscal framework, should be met this year
The Ministry of Finance consulted the TCU (Federal Audit Court), on Thursday (September 28, 2023), about the need to invest the minimum amount required by law in health and education. Here’s the complete of the document (PDF – 274 kB).
In the questioning obtained by the Power360, the government highlighted that the new fiscal framework was sent to the National Congress 4 months ahead of schedule, on April 18th. The rule was approved by congressmen on August 30th, and the deadline that Planalto had to forward the proposal to the Legislature expired on August 31st.
The rule, which replaced the spending cap, resumed the obligation for minimum investments in health and education. It established that the government allocates 15% of its net current revenue to health and 18% of the revenue collected from tax collection for education.
The Treasury’s question to the TCU is whether the floor would be valid for 2023 or only for 2024. In the consultation, the Treasury argued that compliance with the rules this year “would generate concerns and concerns regarding both annualized budget planning and risks in the quality of resource application itself, since budget execution is already in its last four months”.
“A hypothetical modification of the costing rules to lead to a mandatory expansion of the allocation of resources during the annual budgetary execution, without prior time for planning and due analysis of the allocation, would encourage the possibility of improvised use of public resources without reaching, of effectively, the public policy objectives underlying the aforementioned minimum costs and which are an integral part of them. Furthermore, it would generate impacts on the primary result, creating uncertainty and negatively affecting expectations about the Brazilian economy”, he added.
In order not to be forced to comply with the rule immediately, the government also cited the increase in health and education resources of around R$30 billion, guaranteed by the LOA (Annual Budget Law) of 2023.
Questioned by Power360the TCU did not take a position on the topic until the publication of this post. The space remains open.
#Government #consults #TCU #investment #health