The mandatory spending review measures to be sent by the government will involve the sending of at least one proposed amendment to the Constitution (PEC), said this Wednesday (30) the Minister of Finance, Fernando Haddad.
The Minister of Planning, Simone Tebet, informed that the proposals will make up the first of two “structural packages” to be presented by the government.
“Invariably, it will be a proposed amendment to the Constitution. So, as there is something that will be voted on this year regarding finance, probably, if it conforms in this way, it should be included in a constitutional amendment”, Haddad told journalists, upon leaving the Ministry of Finance.
According to the minister, the spending review is necessary to “make mandatory expenses fit” into the fiscal framework, which limits government spending growth to 70% of real growth (above inflation) in revenue from the previous year.
Regarding the submission deadline, Tebet explained that most of the proposals foresee cuts only from 2026 onwards. She reiterated that the government intends to send the measures as quickly as possible to Congress, even if they are only voted on next year.
“For me, we need to present now [ao Congresso] in the month of November. Not all measures, in fact, the majority do not need to be approved this year because the issue is not the impact in 2025, but in 2026”, he explained.
Tebet considers the mandatory spending review package “consistent” and said that the measures aim to make public spending more efficient without eliminating rights. “What we need is to present a consistent, authorized package to the country that gives comfort to the President of the Republic. Making it clear that we will not take away any rights. This was a consensus between Minister Haddad and I, it is not just a request from the [presidente] Lula”, stated the minister.
Meeting
On Wednesday afternoon, the ministers who make up the Budget Execution Board (JEO) met to discuss, among other topics, actions to curb the growth of public expenditure. The board is made up of the following ministers: Rui Costa (Civil House), Fernando Haddad (Finance), Simone Tebet (Planning) and Esther Dweck (Management and Innovation in Public Services).
On Tuesday night (29), President Luiz Inácio Lula da Silva met with Haddad, the future president of the Central Bank, Gabriel Galípolo, and the president of the National Bank for Economic and Social Development (BNDES), Aloizio Mercadante , to discuss cost-cutting measures. The four-hour meeting took place at Palácio da Alvorada and was also attended by the executive secretary of the Ministry of Finance, Dario Durigan, and the department’s secretary of Economic Policy, Guilherme Mello.
According to Haddad, the meeting was fruitful, with the government reaching an understanding on the measures to be sent. “Yesterday was a good meeting, because there was an important convergence around the principle of strengthening the fiscal framework and an idea that has to be analyzed legally, but that serves the Treasury. Mandatory expenses have to find a way to fit within the framework, because that is what makes you sustainable”, he declared.
Financial market
Regarding the turbulence in the financial market in recent days, Haddad said he understood investors’ concerns, but complained about speculation surrounding the tone of recent statements by the economic team. “I even understand the concern [do mercado]but there are people speculating about things, like the way I speak. My job is to try to deliver the best writing possible so that Congress understands the situation in the world and in Brazil”, he said.
After Haddad and Tebet’s statements, the dollar, which had reached R$5.79 during the morning, slowed down and closed practically stable, at R$5.763 (an increase of just 0.04%). The stock exchange fell 0.07%, closing at 130,639 points.
