Two months after Finance Minister Fernando Haddad announced a cut of around R$26 billion in spending in the 2025 Budget, the economic team announced, this Wednesday (28), in Brasíliathe details of mandatory expenditure review measures. The main focus is on improving management and reducing fraud.
Of the R$26 billion budgeted, the plan effectively includes R$19.9 billion in registry reviews. The remaining R$6.1 billion will come from what the Ministry of Planning called internal “reallocations” of funds in the ministries that will return spending on Bolsa Família, personnel and the Agricultural Activity Guarantee Program (Proagro) to 2023 levels. The reduction in mandatory spending would be freed up for discretionary (non-mandatory) spending.
Of the R$19.9 billion promised in the review, the largest part – R$7.3 billion – will come from a review of spending by the National Institute of Social Security (INSS). Of this total, R$6.2 billion will come from the fine-tooth comb of Atestmed, the INSS system for granting sick pay through digital medical certificates, without expert examination. Another R$1.1 billion will come from precautionary and administrative measures.
Secondly, there is the review of the Continuous Benefit Payment (BPC), whose growth in expenses was one of the factors that made the government block R$11.2 billion in discretionary spending in July.
The government intends to save R$6.4 billion next year with the benefit: R$4.3 billion through the update of the Single Registry for Social Programs of the Federal Government (CadÚnico) and R$2.1 billion through the reassessment of expert reports.
Next comes R$3.2 billion from the reassessment of INSS disability benefits, which includes both sickness benefits and disability retirement. The list is completed by R$1.9 billion in changes to Proagro and the R$1.1 billion fine-tuning of unemployment insurance.
Conservative projections
At a press conference to announce the spending review plan, the Secretary of Monitoring and Evaluation of Public Policies and Economic Affairs at the Ministry of Planning, Sergio Firpo, admitted there were uncertainties in the figures. He did, however, say the savings could be higher because the projections are conservative.
“There is an associated uncertainty. We have estimates that are the best we can get with the existing information. There is a margin of error, there is. We have been conservative, but it is obvious that there is uncertainty,” said Firpo.
According to the executive secretary of the Ministry of Finance, Dario Durigan, the measures announced today are just a “first step”, and the government can take additional actions.
“What we are showing now is where the R$26 billion will be spent. Of course, other things need to be done and will be done. The work of reviewing spending is done all the time,” he analyzed.
Economy in 2024
Regarding the spending review measures for 2024, Durigan did not provide details. He only said that the “pace is very positive and even above expectations.” In July, the Ministries of Finance and Planning had announced that the government intended to save R$10 billion this year with the spending review.
Firpo, however, reported some partial figures. Until June, the review of spending on Atestmed generated savings of R$2 billion out of a total of R$5.6 billion expected for this year.
The review of disability benefits reduced INSS spending by R$1.3 billion in 2024, with the cancellation of 133 thousand benefits out of a total of 258 thousand reassessed.
