The government’s spending cuts package is practically complete, depending only on the position of the Ministry of Defense. The statement was made by the Minister of Finance, Fernando Haddad, during an interview broadcast on the CNBC Times Brasil channel, which went into operation this Sunday (17).
According to him, the measures are already in line with President Luiz Inácio Lula da Silva and aim to guarantee sustainable economic growth within fiscal rules.
The expectation, according to O Globo, is that the official announcement of the measures will take place after the visit of the President of China, Xi Jinping, and the end of the G20 Summit in Rio de Janeiro.
The minister says that the package seeks to correct distortions and prevent the fiscal framework from losing credibility, which would compromise confidence in the economy.
He highlighted that the government is focused on keeping expenses under control and restoring revenues, after years of fiscal deficits that, according to him, harmed the country’s economic growth.
“We need to ensure that expenditure grows at a moderate pace and that revenue is restored. We lose a lot of revenue by granting subsidies, often without an adequate return”, he stated.
The package, which foresees savings of R$25 billion to R$30 billion in 2025 and R$40 billion in 2026, includes changes in the readjustment of the minimum wage, adjustments in the criteria of social programs, such as Bolsa Família, and a fight against which the minister calls “super salaries”.
The measures will affect areas with the largest budgets, such as Health, Education and Defense. Haddad acknowledged the pressure to avoid cuts in social areas, but defended the adjustments as essential to guarantee fiscal balance. “I was already Minister of Education and I have also complained. Each ministry defends its agenda, but we need to think about the whole, so that everyone can grow together”, he highlighted.
The head of Finance stated that, by reducing distortions and improving fiscal management, it will be possible to encourage private sector activity, stimulate job creation and promote robust and sustainable growth.
Furthermore, he highlighted that adjustments to military pension rules are being discussed in collaboration with the commanders of the Armed Forces.
