The new Minister of Finance, Fernando Haddad, said today (2), during a ceremony for transferring his position, that the “irresponsible” increase in expenditures and some tax waivers promoted by the previous government would total a deficit of R$ 300 billion in public coffers, but that this will be reviewed by the current government.
He added that he will send to the National Congress a proposal for measures aimed at increasing investor and citizen confidence in economic policy, through a “long-term social, environmental and economic sustainability plan”. According to the minister, the proposal will be forwarded in the coming weeks, after approval by President Lula.
“The fiscal framework that we want to send to Congress, right at the first moment, will have reliable premises and will technically demonstrate the sustainability of our finances, embracing the financing of the umbrella of priority government programs. At the same time, it will guarantee the sustainability of the public debt. There is no magic, silver bullet or financial juggling. What exists is to guarantee a strengthened State with economic predictability, trust, transparency”, said Haddad.
The minister also said that the country’s economic situation was harmed by electoral measures practiced by the previous government, which distributed “benefits and tax exemptions to companies and friends, disobeying any criteria other than winning the election at all costs.”
New economic team of the Ministry of Finance at the handover ceremony at the Centro Cultural Banco do Brasil (CCBB) – Marcelo Camargo/Agência Brasil
losses
“Even after the election, we had a bad example of transition: on December 30th, they were able to publish in Official Diary of the Union two decrees that will give more than R$ 10 billion in damages to the public coffers. These are the patriots who are leaving power”, added the minister, referring to decrees published at the last minute to reduce the taxation of companies.
“The cost is well known: 3% of GDP was spent on irresponsible increases in spending and tax breaks. We are therefore talking about a shortfall of R$ 300 billion caused by insanity”, he said, stating that he will review what he classifies as “illegal acts” committed by the previous administration.
“This and other mistakes of the government that ended need to be corrected. Therefore, we will not accept this primary result provided for in the current budget law, which provides for an absurd BRL 220 billion deficit in the 2023 budget”, he added.
Recovery
For the minister, in addition to working towards the recovery of public accounts, it will be necessary to combat inflation and make the country grow again with sustainability, responsibility and, above all, with social priority, generating “jobs, opportunity, income, decent wages, food on the worker’s table and fairer prices”.
The tax system that is being planned will be more efficient, at the same time that it will remove, according to him, “weight” from low-income families. In addition, it will seek to promote and take advantage of the Brazilian potential to generate new energies: wind, solar, hydrogen and oceanic.
“A strong State is not a big and obese State, but one that responsibly delivers what is foreseen in the Constitution. We do not want more or less than the rights of citizens to be respected, and that includes, of course, fiscal responsibility. These things have to go together”, he argued.
Economic policy
In the evaluation of the new minister, there is no fiscal or monetary policy in isolation.
“What exists is economic policy, which needs to be harmonized or Brazil will not recover from this tragedy. We have the highest interest rates in the world in real terms and we do need to seek understanding and balance between the fiscal and monetary authorities”.
Haddad said that the ministerial team assembled by him is practical and not dogmatic, and that it will seek results based on principles and values. “We are not here for adventures, but to ensure that the country grows again to meet the needs of the population in what are their constitutional rights in health, education, in the social sphere, and at the same time to guarantee balance and fiscal sustainability”.
“I feel very comfortable working with a team made up of Geraldo Alckmin, Simone Tebet and Ester Dweck. We were Posto Ipiranga and now we are a network of service stations. It was too bad to concentrate all the eggs in one basket, as it was done. We want to act collegially and listen to society. We are not here to teach, but to present our arguments, learn and seek the best path. The more consensual, the better it will be”, he added.
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