The government of Brazil announced the beginning of the transition with the elected president, Luz Inácio Lula da Silva. The Civil House Minister, Ciro Nogueira, reported that the president, Jair Bolsonaro, authorized him to begin the “transition” with Lula’s representatives.
The communication coordinator of the PT campaign, Edinho Silva, confirmed this afternoon to the G1 portal that he began talks with Nogueira to coordinate the transition.
Increase in public spending
Also, in an interview with Reuters, keep gave details of what will be the first task of the new government that will take over from the right-wing Jair Bolsonaro on January 1: review a budget proposal for 2023 which he called “fiction”.
Mantega said the government would have to exempt at least 120 billion reais in new spending from a constitutional ceiling of spending to fulfill campaign promises, such as more generous welfare programs.
For the government to also expand “emergency” public investments in infrastructure and housing, it may have to free up more than 200 billion reais, he added.
Deficit
Mantega also warned of a potential federal revenue shortfall next year if the economy expands less than the 2.5% GDP growth projected in the budget bill.
“If you look at market projections, the way things are going, growth would be 0.5%. If the economy grows 0.5%, you won’t get the expected revenue. Plus, inflation will be lower, and we know that inflation helps tax revenue,” he said.
Mantega said the newly elected government should work this year with lawmakers to ask for a constitutional exemption to increase spending next year, while a transition team under Lula would begin debating the long-term policy that will replace the current one. spending limit.
“To reach a consensus on the fiscal anchor, more discussion time is needed,” he said.
Mantega said Lula’s advisers are weighing two main proposals for a fiscal framework. The first implies a target range for Brazil’s primary surplus and the second is a rule that allows the expansion of public investments.
Lula has committed to exempt from payment of income tax workers who earn up to 5,000 reaiswhich, according to Mantega, would cost about 120,000 million reais.
“It is a very high cost, it would have to be done gradually and in the midst of a tax reform without unbalancing public accounts,” he said.
Mantega said that “certainly” he will not assume any ministry, and suggested that both the tax reform and the new fiscal policy will be designed with the collaboration of economists who helped stabilize the economy in the 1990s, such as Pedro Malan and Persio Arida.
He stressed that the center-left coalition forged by Lula’s campaign will be reflected in his policies over the next four years, which will still leave room to combat poverty and increase public investment.
Source: Ambito
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