Congress’s changes to the spending cut package will mean that the government will no longer save around R$1 billion in planned resources, Finance Minister Fernando Haddad said this Friday (20). The minister presented the estimate at an end-of-year breakfast with journalists.
Minister of Finance during breakfast with journalists – Fabio Rodrigues-Pozzebom/ Agência Brasil
When presenting the spending cut package at the end of November, the government projected savings of R$71.9 billion in 2025 and 2026. Even with significant changes in some points of the proposals, Haddad said that the economy will be just over R$ $70 billion, with a difference “around R$1 billion”, when disregarding decimal places.
According to the minister, the economy with the limitation of super salaries in the public service, dehydrated in the votes, did not affect the estimate because the project does not reach the primary result of the Executive Branch, but of other Powers.
Federal District
According to Haddad, the biggest impact came from the removal of the changes planned for the Constitutional Fund of the Federal District (FCDF) from the package. He did not give a number on this loss. The government wanted the fund to be corrected by official inflation by the Broad National Consumer Price Index (IPCA), instead of the current correction by the Union’s net current revenue, which allows adjustments above inflation.
The minister justified the proposal to change the FCDF correction based on the consumption tax reform recently regulated by Congress. According to Haddad, the Federal District will have significant gains with the change in the collection of the future Tax on Goods and Services (IBS) at the destination (place of consumption of the goods).
“We understand that the measure [mudança no FCDF] It was fair for a simple reason. The GDF [Governo do Distrito Federal] It is the entity that gains most from tax reform. From the moment the tax goes to its destination, the DF, a place of high consumption, will have gained from the tax reform. We understand that this fund would have to stay within the fiscal framework”, declared Haddad.
