The economic team will take a set of cost-cutting measures to President Luiz Inácio Lula da Silva shortly after the second round of municipal elections, said this Tuesday (15) the Minister of Planning and Budget, Simone Tebet. She met this afternoon with the Minister of Finance, Fernando Haddad, to define the measures to be suggested.
The minister did not anticipate any measures to be presented. He just said that almost all actions depend on the National Congress and that it will be up to President Lula to choose which measures the government will send to the Legislature. “Brazil has already done its homework on the revenue side, it is no longer possible to solve the fiscal problem through revenue”, he declared.
According to Tebet, just one of the measures, if approved by Congress, will result in savings of R$20 billion per year. She, however, did not say what spending review measure this would be.
The minister guaranteed compliance with the primary result targets of zero deficit in 2024 and 2025 and a surplus of 0.25% of the Gross Domestic Product (GDP, the sum of all goods and services produced in the country) in 2026. Tebet, however , hinted that the spending review plan will be important to achieve the goals.
“The fiscal framework is in place and will remain in place. There is no sign to make any type of change. Consequently, Brazil needs to fit within the fiscal framework”, he stated. “Brazil has already done its homework on the revenue side, it is no longer possible to solve the fiscal problem through revenue”, he added.
Simone Tebet said that the government will send as many spending review measures as possible in 2024 with a better chance of being approved or, at least, having discussions started. The measures, informed the minister, will focus on ordinary and complementary bills and proposed amendments to the Constitution (PECs). In the case of the PECs, the minister did not rule out the government piggybacking on any amendments being processed in Congress.
Although he stated that one of the measures will result in savings of R$20 billion per year, Tebet highlighted that the economic team is not working with a savings target with the measures to be presented, because rights will not be withdrawn. “The spending review will not take away a single right. We are not closing a bill of R$100 billion, R$50 billion or R$80 billion”, he explained.
At the end of August, the Ministries of Finance and Planning presented a plan to cut R$26 billion of spending in the 2025 Budget. These actions do not require Congressional approval and focus on improving management and reducing fraud. According to Minister Simone Tebet, the plan represents a new stage in the government’s commitment to improving the quality of public spending.
