Economy Minister Paulo Guedes said that the R$ 400 Brazilian Aid, announced by the government on Wednesday, is a “prototype” of what would be the basic income program that was being developed by the economic team. “We have a prototype of what would be the basic family income. There is no source for a permanent program, so a part is transitory. We were counting on income tax reform, but it didn’t make progress in the Senate. We were left without a source”, he completed.
Guedes participated in Forum Incorpora 2021, of the Brazilian Association of Real Estate Developers (Abrainc). The minister’s speech was scheduled to take place in person, in São Paulo, but, in the midst of negotiations for the new Auxílio Brasil, he stayed in Brasília and participated remotely.
The minister also said that he is “very sure” that he is maintaining a “double commitment” with the most vulnerable and with fiscal balance. The minister considered that the pandemic exacerbated social imbalances. “We are creating programs that alleviate the inequality problem.”
Guedes also explained that the program will have to be temporary precisely because there is no source of funding. The government expected the taxation of dividends provided for in the income tax reform to offset the increase in spending on the social program. “As emergency aid was expiring, the government decided to create what would be a basic family income program. It’s still not what it will be,” he said.
He said that the program will go from the 14 million people covered by Bolsa Família to R$ 17 million and will have a “transitional phase”. According to Guedes, the value of R$ 400 was defined by the president to offset the rise in energy and fuel prices.
“It’s a transitional layer of protection that takes us to December of next year,” added Guedes. “While we are impacted by the calamity of the pandemic, we need a program that can cover rising food and energy prices for the most fragile.”
Synchronization
The Economy Minister said that in order to find resources for the creation of a social program of R$ 400 per month, the government is studying anticipating the revision of the expenditure ceiling planned for 2026. “We were studying expenditure synchronization, anticipating a revision of the 2026 ceiling. Or we could ask for a waiver, a license to spend with a temporary layer of protection”, he explained, without giving further details.
Guedes said that the government has “a series of restrictions” important to prevent the growth of spending. Amid the discussion of Auxílio Brasil, a program that the current government wants to create to replace Bolsa Família, Guedes said that the government has social commitment, but with fiscal responsibility.
“We are still finishing and seeing if we can make the program compatible,” he said. “The fiscal commitment continues. There is no shortage of food, gas and energy for the most fragile Brazilians. But we have to pay the costs of our wars”.
The minister also said that there are “natural internal disputes”. “There are people with a more political outlook, want to spend a little more, it’s natural”, he defended. “It’s natural that there’s a class with a more rigid, economical look,” he pondered.
For Guedes, the collection of taxes is R$ 200 billion above the forecast, it would allow the government to “spend a little more”. “The important thing is that the primary deficit continues to fall”, he believes.
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