The Federation of Commerce of Goods, Services and Tourism of the State of São Paulo (FecomercioSP) classified the fiscal package announced this week by the Ministry of Finance as insufficient. For the federation, the measures are positive, but there is fear that the plan will only have temporary effects. Casting doubt on compliance with the fiscal framework, the entity reinforced the importance of a greater debate on Administrative Reform.
The Ministry of Finance’s preliminary estimates are that the announced measures will provide savings of R$30.6 billion in 2025 and R$41.3 billion in 2026. In the accumulated period from 2025 to 2030, the ministry calculates, the amount saved will reach to R$327 billion.
Fiscal package has no long-term effects, says federation
In FecomercioSP’s assessment, the Lula government’s announcements are not enough to balance the country’s accounts in the long term. For the federation, the announced cuts do not represent a definitive solution, and are only a palliative measure to give a short breather to the Brazilian economy.
“By not tackling the spending problem at its root, the fiscal package has a temporary effect. For the Federation, the consequence is that it won’t be long before the country needs another fiscal plan, since it cannot change mandatory expenses, which currently account for more than 90% of the budget”, highlights the note released by the entity this Friday- fair (29).
FecomercioSP points out that the federal government’s priority should be the relationship between public debt and the country’s Gross Domestic Product (GDP). Instead, the note says, the ministry sought to solve an economic problem with a political stance. In the entity’s accounts, around R$60 billion relating to the renegotiation of states’ debts with the Union were left out of the 2024 fiscal framework.
“Some expenses were not considered [além das dívidas dos estados]. There are expenses for court orders, around R$44 billion; the costs of flooding in Rio Grande do Sul, R$29 billion; of the R$14 billion Gas for All program. They leave doubts about what will be considered in the rules of the framework for the next two years”, he warns.
FecomercioSP recognizes positive points in the tax package
The federation recognizes that there are positive points in the plan announced by the Minister of Finance, Fernando Haddad, including the review of military pensions and the establishment of an income level for access to the salary bonus. Even so, the long-term economic effects of these actions will be irrelevant, the note points out.
“It is necessary for the government to detail what actions will be taken from now on so that this proposal can effectively get off the ground. The State should focus on improving the quality of public services offered to the population by streamlining the excessive costs that maintain the machine. At the same time, it must focus on mechanisms that streamline these services”, concludes FecomercioSP.
