The goal of closing the public finance deficit by 2024 was presented by Haddad at the beginning of the year, together with the new fiscal framework, which replaces the old spending ceiling.
BRASILIA – The president Luiz Inácio Lula da Silva refused this Sunday, 5th, to talk about the possibility of changing the objective set by the Minister of Finance, Fernando Haddad, to bring the public finance deficit to zero next year. “[Sobre] the fiscal goal, you will ask me on Monday. Today is Enem day”, Lula replied to journalists, when asked if the government has already decided whether or not to change the target now. The PT MP spoke to the press at the headquarters of the National Institute of Educational Studies and Research Anísio Teixeira (Inep), in Brasilia, on the first day of the National high school exam (Enem) 2023.
In recent days the government has faced internal conflict over the headline target for 2024, which was initially set by the economic team with a zero deficit. Haddad is still trying to convince Lula not to make any changes to the fiscal target until at least March, when the first report assessing revenues and primary expenditures for next year will be released. It is in preparing this document that the government will know whether there will be sufficient revenue to cover the Executive’s planned expenditure – and which will reveal whether or not the zero deficit target will force the government into unexpected expenditure.
The goal of closing the public finance deficit by 2024 was presented by Haddad at the beginning of the year, together with the new fiscal framework, which replaces the old spending ceiling, with more flexible rules for spending. The political wing of the government and the The president of the PT, Gleisi Hoffmann, however, were against the zero deficit goal because they understood that fiscal tightening could undermine economic growth. The Finance Minister resisted the “friendly fire” and focused on Congress approving revenue-raising measures, but, after Lula’s statements, the pressure to change objectives increased again.
Lula said, in a coffee with journalists on the 27th, that the government will “hardly” be able to close the fiscal deficit in 2024 and said he does not want to make investment cuts to reach the goal. “Anything we can do to hit the fiscal target, we will do. What I can say is it doesn’t need to be zero. We don’t need it. I’m not going to set a fiscal target that forces me to start the year cutting billions in works that are priorities in this country”, declared the PT deputy.
Last Wednesday, 1, members of the government consulted the rapporteur of the Law on Budgetary Guidelines (LDO) of 2024, Danilo Forte (União Brasil-CE), this Wednesday, 1, on a possible change of the objective. The deputy was summoned to the Palácio do Planalto and participated in a meeting with ministers Rui Costa (Civil Housing), Alexandre Padilha (Institutional Relations) and Simone Tebet (Planning) and with the executive secretary of the Ministry of Finance, Dario Durigan.
The government asked the MP whether it is possible to change the LDO target, but has not yet indicated whether it will send an amending message to change the target of zeroing the public finance deficit in the preliminary report, the vote on which is scheduled for next Tuesday – fair, 7th, at the Mixed Budget Committee (OCM). The ministers signaled that there will be new meetings to decide on the objective and that the decision will be taken by Lula.
Forte, who has been defending the change of focus for months, reiterated that he is willing to reach an agreement. After the vote on the preliminary report of the LDO, the government will not be able to send the modification message, but the deputy underlined that the change in the fiscal target can occur through parliamentarians’ amendments to the final opinion. In this case, if Congress followed the schedule set for the LDO, the amendment would have to be tabled by the 17th. The vote on the final report would have to take place the week of the 20th.
Source: Terra
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