The Minister of Planning and Budget, Simone Tebet, said this Friday (14th) that if maintained, the spending ceiling would make it difficult for the public machine to function, leaving the government without money even for basic costs, such as electricity bills. The situation, however, would be resolved, according to her, with the approval of the new fiscal framework.
“Without the framework, we can say that, at certain costs, for the machine to work we would have difficulty. We are not talking about shutdown [paralisa completa], we are talking about expenses such as water and electricity. We have to cut somewhere to minimally cover the expenses of the Executive branch”, he said after participating in an event at the Getulio Vargas Foundation, in São Paulo.
The fiscal framework is the new set of rules that will determine spending control measures, in lieu of the spending cap. With the change, there is more flexibility in spending limits, which will be calculated from the result of public accounts.
However, as what is still in effect is the spending ceiling, Tebet said that the Budgetary Guidelines Law (LDO) for 2024 was drawn up from this legislation. For this reason, the budget forecast for next year, before the framework, “will scare”, according to the minister. “It will show that there is no fiscal space for absolutely nothing new”, she emphasized.
According to the minister, the text of the LDO should be published this Friday in the Official Gazette, in an extra edition. The text will already foresee, according to her, the changes if the approval of the new fiscal rules is confirmed.
“We are already putting a conditional indicator. In the case of approval by the National Congress of the new fiscal framework, the parameters are already there, and the indicators and numbers will be different.”
Tebet said that the spending cap no longer makes sense due to the need to rebuild mandatory expenses, especially in the social area. “Minha Casa, Minha Vida track 1 was paralyzed for four years. No popular houses were built. So, these are permanent expenses that are necessary to serve the population that needs it most, ”she said.
