Public spending out of control in Brazil

According to the planning minister, public expenditures have been on

Published on 24/08/2016 - 15:10 By Daniel Lima reports from Agência Brasil - Brasília

Rio de Janeiro - O ministro interino do Planejamento, Desenvolvimento e Gestão, Dyogo Henrique de Oliveira, durante posse da nova presidente do BNDES, Maria Silvia Bastos Marques (Tomaz Silva/Agência Brasil)

Acting Minister of Planning, Development, and Management Dyogo Henrique Tomaz Silva/Agência Brasil

In a statement made today (Aug. 24), acting Minister of Planning, Development, and Management Dyogo Henrique said that public spending in the country is out of control and has taken a relentless growing trend.

The minister pointed out that, despite the constitutional amendment bill setting a ceiling for growth in public spending, limiting it to the inflation rate from the previous year, the debt is likely to remain on the rise for a few years, as the adjustments to be made should not yield automatic results.

The minister is taking part in a public hearing held by the special committee on the new fiscal regime at the lower house. Since 1997, all presidents have left government expenditures at a level higher than the previous administration, he says.

Dyogo Henrique highlighted that the discussion on the trajectory of the debt is key. The country, he argues, could be led to collapse scenarios like the one faced by Greece, whose debt was unsustainable.

“We're facing a severe crisis in the states, one that creeps up to the federal government. The federal budget is fossilized, with obligatory expenditures. We have to implement not just this amendment bill, but also other reforms,” he declared.

In line with the arguments of Finance Minister Henrique Meirelles, Dyogo Henrique noted that “to increase the tax load” is not a sustainable answer “if we want to show society that the State is capable of managing our expenditures. We don't decide on what how much money we make, but we do decide on how much money we spend,” he remarked.

Earlier on, during the same hearing, Meirelles told congress members that the government cannot solve the deficit and debt problems solely by raising taxes. In his view, Brazil's tax load reached exceedingly high levels in the past few years, and is now regarded among the biggest in the world.


Translated by Fabrício Ferreira


Fonte: Public spending out of control in Brazil

Edition: Lílian Beraldo / Nira Foster

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