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November 29, 2024
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Spending cut package predicts savings of R$327 billion in five years

Spending cut package predicts savings of R$327 billion in five years

The savings estimated by the mandatory spending cut package are estimated at R$71.9 billion in 2025 and 2026 and at R$327 billion from 2025 to 2030, the Ministry of Finance reported this Thursday (28). The ministry is detailing the measures announced on Wednesday night (27) by minister Fernando Haddad.Spending cut package predicts savings of R$327 billion in five years

According to calculations, the year-by-year savings are estimated as follows: R$30.6 billion in 2025; R$41.3 billion in 2026; R$49.2 billion in 2027; R$57.5 billion in 2028; R$68.6 billion in 2029; and R$79.9 billion in 2030. The Ministry of Finance highlighted that the projections are preliminary.

The ministry also released the estimate of positive fiscal impact depending on the type of proposal to be sent to Congress. The proposed amendment to the Constitution (PEC), which could be included in another PEC that is already being processed in Parliament, will allow savings of R$11.1 billion in 2025; R$13.4 billion in 2026; R$16.9 billion in 2027; R$20.7 billion in 2028; R$24.3 billion in 2029; and R$28.4 billion in 2030.

The PEC will address the following points: salary bonus, Fund for Maintenance and Development of Basic Education and Valorization of Education Professionals (Fundeb), extension of the Untying of Union Revenues (DRU), authorization for budget adjustment in subsidies and grants and variation of resources from the Constitutional Fund of the Federal District (FCDF) by the Broad National Consumer Price Index (IPCA).

The following topics will be addressed through bills (complementary or ordinary): ceiling for readjustments in the minimum wage, restrictions on the granting of Bolsa Família and the Continuous Payment Benefit (BPC), transfers of the Aldir Blanc Law, biometrics for granting of new social benefits and for registration updates and correction of distortions in military pensions.

The proposals to be addressed by bills will result in savings of R$11.7 billion in 2025; R$19.2 billion in 2026; R$24 billion in 2027; R$30.1 billion in 2028; R$37.3 billion in 2029; and R$44.5 billion in 2030.

Amendments and contests

Measures such as staggering competitions and filling vacancies in 2025, which can be done internally by the government, will have an impact of R$1 billion per year from 2025 to 2030.

Changes to parliamentary amendment rules will guarantee savings of R$6.7 billion in 2025; R$7.7 billion in 2026; R$7.3 billion in 2027; R$5.6 billion in 2028; and R$6 billion in 2029 and 2030. Part of the changes in the rules for amendments were recently sanctioned by President Luiz Inácio Lula da Silva.

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