Government proposes reducing 2016 fiscal target to 0.5%
Senator Rose de Freitas, chair of the Joint Budget Committee (CMO)
Even though the fiscal surplus target for 2016 has been set at 0.7% of Gross Domestic Product (GDP), sources at the presidential palace report that President Dilma Rousseff submitted a proposal to Congress Monday (Dec.15) to reduce it to 0.5% of GDP. The move is designed to avoid cuts in social welfare programs including Bolsa Família. The proposal could be voted Wednesday (Dec. 16).
Earlier, the rapporteur for the budget guidelines bill (LDO), Deputy Ricardo Teobaldo, met with Chief of Staff Jaques Wagner and the Minister of the Government Secretariat of the Presidency, Ricardo Berzoini, to negotiate a flexible target that should range somewhere in between 0 and 0.5%.
The existing primary surplus target outlined in the budget bill as approved by the Joint Budget Committee of Congress is $11.32 billion, consisting of $8.89 billion for the federal government and $2,42 billion for state and local governments. This means the country would have to save 0.7% of the GDP.
Teobaldo should submit the proposed 2016 fiscal target revision Wednesday at the plenary session of Congress that will vote on the budget guidelines. The new draft would change the fiscal target to $6.20 billion for the federal government and $1.69 billion for states, the Federal District and municipalities, totaling a $7.90 billion saving commitment for the public sector.
Also under the amendment, the government is allowed to make deductions from the $7.90 billion in case of loss of revenue and in order to settle outstanding public investment debts and initiatives in healthcare, health inspection, drought relief and other disaster-related efforts.
Tuesday (15), Senator Rose de Freitas, chair of the Joint Budget Committee (CMO), complained to the budget guidelines rapporteur that she was not involved in the negotiations to lower the fiscal target. She met with Finance Minister Joaquim Levy in the afternoon and denied awareness of any such negotiations.
Minister Levy himself reaffirmed the government's commitment to the 0.7% of GDP in 2016, following a meeting with party leaders and budget committee representatives. He urged them to approve three temporary presidential decrees that could increase the government revenue and thus avoid a $2.58 billion cut in the Bolsa Família cash transfer program next year as well as cuts in other welfare programs proposed by the annual budget bill rapporteur, Deputy Ricardo Barros.
The lower fiscal target would make the cut unnecessary.
*Information from Senate and Chamber of Deputies news reports was added to this story.
Translated by Mayra Borges
Fonte: Government proposes reducing 2016 fiscal target to 0.5%
