The Transition PEC envisages expenditure with investments of up to 23 billion reais outside the ceiling in the event of extra income; Reginaldo Lopes met with fund managers, who want ‘guarantees of commitment’
BRASÍLIA – Group leader of the PT in the Chamber of Deputies, Reginald Lopes (MG) hints with the proposal to postpone to 2025 the rule that triggers the trigger to exclude investments from the spending ceiling based on extraordinary income.
If brought forward in the negotiations, the idea would represent, in practice, a measure to reduce the Proposal to amend the Constitution (PEC) of the Transitionwhich allows for an expansion of R$ 200 billion outside the spending ceiling, a rule which limits the growth of public spending to the previous year’s change.
The trigger to increase investment has been included in the PEC, presented this week by the elected government’s transition team, with an impact of BRL 23 billion in 2023. According to him, one of the ideas would be to trigger the trigger when there is a balance between income and expenditure.
In the interview with Stagehe says it would be a good sign for investors if the PEC already includes a constitutional command to review the spending ceiling in 2023 through a complementary law.
After the market’s negative reaction to the PEC, the PT leader had a series of meetings with investment funds, who want predictability. Below are the main excerpts from the interview.
Like mr. Do you evaluate the proposal to include in the PEC having already a command to review the expenditure ceiling with a complementary law?
For me it can be a good sign. We have three tax rules: the primary result, the golden rule and the spending limit. We could modernize in one rule, one framework. I doubt that the tax liability law should fit into this framework. I would propose to unify. During the campaign we had a lot of discussions about the need to modernize tax laws, with predictability and, above all, sustainability. For me it could be a signal to let in the PEC that the government undertakes to order in 2023. It could be by supplementary law.
As leader of the PT, what is the political space for this path to take place?
There is social gain only if there is actually economic stability. Stability is essential for social policies, raising the minimum wage and investment works to accelerate the distribution of wealth. In that sense, there is political space in Congress as a whole to hold this debate. The PEC could also signal some progress in the commitment to review tax breaks. There’s plenty of room for that. Second, it can undertake to review contracts. Third, it can make a commitment to actually move forward in a more digital and more technological government.
Put these commitments already in the PEC?
IS. A bit of a compromise, huh? When we speak of the market, we are not speaking of an abstract entity, but of entrepreneurs, giants, medium-sized, small and single individuals. In the end, any fiscal imbalance, everyone foots the bill. It is essential that we reassume the commitment not to leave any Brazilian hungry, without income and, who knows, without a job: these expressed commitments help this crossing. Because we cannot govern Brazil in 2023 without opening budget spaces.
Mr. has spent the past two days in meetings with financial market institutions. How were those meetings? They want a sign of the new tax rule.
Yes. They want commitment guarantees. They welcomed Vice President Alckmin’s speech and mine because there was convergence when it came to reviewing contracts, making the state more efficient, looking at tax breaks and thinking about a new rule. A new framework, more dynamic and modern. It has been very well accepted. I spoke to 14 large funds and today with XP.
what mr. heard from them?
The concern that the country cannot miss a window of opportunity. I think so too. But I think more: we can make the first reconstruction movement in Brazil, guaranteeing income with adequate income to stop the cycle of poverty. The government must signal that it will also create a more efficient state, which will seek a balance between income and expenditure, which will not put the country in debt. But we also need to modernize the country from the point of view of the new industry. Lula is very popular and her figure could attract foreign investment. And with them we can modernize a new industry, 4.0, the digital economy.
Can the Transition PEC be cancelled? Is there room for negotiation?
In investments (the PEC gives space for spending up to 23 billion reais in investments), forecast for 2025. Maybe create another triggering factor. It is essential that public investment comes before demand. But it cannot undermine private investment. It would be exchanging R$2 trillion for R$100 billion. That would be a mistake. But also having extraordinary receipts, and a point of rebalancing between expenditure and revenue, the old primary surplus, it would be a mistake not to take the opportunity to direct part of these resources to unblock the cost of Brazil. Who knows, maybe we can agree with another breakeven limiter of revenues and direct investment side.
Would that be a proposal to postpone the implementation of the 2025 rule?
They are mediations. It should be remembered that we have not tabled a constitutional amendment. We present a draft (proposal) for construction. It is the posture of the government, of dialogue, of the search for convergences. This is commendable. We are building convergences.
But how would this trigger work?
There is already a trigger, which is 6.5% of extraordinary revenue for 2021 (R$23 billion). You can put a trigger more than, for example, from the fiscal balance, the primary surplus.
How are the political negotiations for the approval of the PEC going?
I think there is a sensitivity of Parliament. This debate was very transparent in the elections.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
