2023-05-14 04:07:58
Ex-minister justifies measure, because, according to him, ‘for the PT, spending is life’
The proposal of tax framework must finally be brought to Chamber of Deputies next week. In an interview with the program “Young Pan Newspaper” this Saturday the 13th Mailson da Nobrega defended that the project maintains the rule of responsibility for the President of the Republic. For the former Minister of Finance, the measure is necessary because, according to him, for the Workers’ Party (PT), “expense is life”. “That should remain. This is the creation of the Accountability Act of 2000. This has never created a problem. On the contrary, it is the stimulus to the pursuit of achieving goals. The government has said that this is not available anywhere in the world, but Brazil is not like all countries. Brazil has an unsustainable tax system with several problems of fiscal responsibility. For example, President Dilma transferred 10% of GDP to ICMS, increasing the public debt in the same proportion. She said that spending is life. The PT, unfortunately, did not incorporate the idea, given its economic anachronism, that what drives the economy is productivity. It is the country’s main source of wealth generation. PT supporters think it’s the expense. So, I think this rule should be maintained”, he analyzed.
To Jovem Pan, Mailson said the framework is “better than imagined”. Even so, the economist evaluated the proposal as “very optimistic” and practically unfeasible. “This fiscal framework came out better than anyone imagined. So much so that Minister Fernando Haddad’s prestige has been increasing with representatives of the financial market. Now, I think the floor is very optimistic in terms of basic issues, such as the primary surplus, which promises to appear in 2024 or 2025. But, if you add the primary surplus projections for the period of Lula’s government, the annual average will be 0, 25% of GDP. However, in order to fulfill and achieve the main objective of this framework, which is to avoid an upward trajectory of the debt-to-GDP ratio, a primary surplus of 1.5% will be needed. Our expectation is that primary surpluses, if they occur, will only happen in 2027 or 2028. Which means that this critical ratio will continue to rise. Here comes the government’s other optimistic position: they promise that this ratio will reach 77% of GDP. Our expectation, at Tendências, like several consultancies, is around 85% to 87%. This is the great drama”, explained the former minister.
“Finally, the framework keeps the real fiscal drama in Brazil untouched, which is the excessive obligation of certain expenditures. Brazil spends more than 90% of GDP on five items of federal spending: personnel, social security, health, education and social programs. Worldwide, this average is 50%. That is, normally the government has half of the Budget to conduct public policies for growth, for the reduction of inequality, of expenses. In Brazil, this is less than 10%, which is unsustainable. So, these goals are only achieved in two cases: when you have spectacular revenue growth, which is unlikely. That’s even if the government manages to eliminate tax expenditures, that is, tax incentives, which it is aiming to attack. The other possibility is exceptional GDP growth, which is the denominator of this equation. These two hypotheses are very difficult to happen. At some point, we will encounter reality, which is the unsustainability of the federal public budget and debt. This government has neither the leadership nor the courage to tackle this serious problem of mandatory spending. As the margin is very low, the government has no possibility of adjustments”, completed Mailson.
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