The exclusion of reimbursement to retirees and pensioners of the INSS (National Institute of Social Security) of the target of primary result, authorized by the Supreme Court (STF) on Thursday (3), rekindles the debate on the solidity of the tax frame.
In resorting to extraordinary credit outside the budget rules, the Lula government once again plays against its own rules and makes room for questions about the predictability of fiscal policy and the risks of weakening control over public accounts. This is what economists explained by CNN.
“It doesn’t give each contingency for us to have a spending on the outside. [A tolerância da meta de primário] It was supposed to be for these situations. The problem is that the government already aims at this lower range of the goal. It loses its function. All this aggravates this perception of fiscal risk, “says Zeina Latif, managing partner of Gibraltar Consulting.
A Faria Lima back manager heard by the report classified the episode as another of several “fiscal bombs” that take the credibility of the framework proposed by the executive himself and approved in the first year of office.
The Lula government sought to establish a limit for the growth of public expenses equivalent to 70% of the previous year’s revenue variation.
Within this band, the expense provided for in the budget is readjusted by the previous year inflation plus a small variation, limited to a 0.6% floor – in times of contraction of the economy – and a 2.5% ceiling – when acceleration.
The rule was well received at first, although economists point to inconsistencies, as spending growing faster than the limit, which would lead them to press the free space of the budget. This is the case of Luiz Fernando Figueiredo, former director of the BC (Central Bank) and chairman of the Jive Mauá Board of Directors.
Figueiredo has already seen the “demoralized” fiscal framework, now, with the INSS movement, its assessment is that the government and the Supreme Court “are making the tax frame a joke, it is for nothing more.”
“If everything the government understands that it is out of what is ordinary it puts it out, what is the framework for? For nothing,” points out the former BC.
This Thursday (3), the STF Minister the Retirees of the INSS victims of the irregular associative discounts.
Already Beto Saadia, director of investments of Nomos, points out the danger of the precedent created by the case of the INSS.
“You create a precedent for other judicial compensation to be out of the tax framework in the future, I think here is where the big problem lives. We can have this dangerous precedent for the future and then the tax framework is even more fragile,” he concludes.
For the public account expert Murilo Viana, “the fact that the government has to look for the Supreme to deal with it, to deal with all the effect on tax rules, it is symptomatic. The government is clearly having a great difficulty to comply with the tax framework.”
The economist points out that the tax rule provides ways for the government to handle public accounts when facing difficulties, such as budget blockages and contingencies.
“So, it is much more symptomatic, in a serious tax framework, to look for another means,” he concludes.
The proposal provides that the payment is made via extraordinary credit. And in his decision, in addition to release that this is done, Toffoli determined that the expense with reimbursement is not computed in calculating the primary result target.
as confirmed in an interview with CNN Prime Time This Thursday the Minister of Social Security, Wolney Queiroz.
“Once again we will play something out of the limits of the tax framework pretending that this will not affect the government’s fiscal situation and the debt trajectory. […] Everything ends up falling into the debt. Debt does not forgive, “says Tony Volpon, former BC director and columnist CNN Money.
Gross government debt – which comprises the federal executive, the INSS and the state and municipal governments – or R $ 9.2 trillion, in April 2025, up 0.3 percentage point of GDP compared to March.
IFI (Senate Independent Fiscal Institution) sees this amount of 81.4% of GDP by 2025 and reaching 95.3% by 2028. From 2030 ,.
“[O gasto com o INSS] It may not be much, but it is relevant. The question is still so far that the government has not been able to contain the debt efficiently, “says Sergio Vale, MB Associados chief economist.
The government works with the goal of balancing expenses and revenues this year, with a tolerance for a deficit of $ 31 billion.
As pointed out by Zeina Latif, one of the problems in managing public accounts lies in the fact that the government works aiming at this track and ending out no room to fit unforeseen expenses.
For the economist, however, the issue goes far beyond the goal.
“When the government technicians released the PLDO [Projeto de Lei de Diretrizes Orçamentárias]the technicians themselves spoke in collapse. The government itself recognizing this picture. The question is not whether the goal is very ambitious, it is much more serious. […] Huge budget stiffness, a state that cannot handle and cannot have well-drawn public policies, “points out Gibraltar’s managing partner.
The economist refers to mandatory expenses – linked to social programs, salary payment and expenditure on health and education – which occupy about 90% of the budget and grow at a faster pace than allowed by the framework limit. Vale complements.
“The government is so plastered that anything that appears today will be by extraordinary credit. It cannot deliver within the budget because it is already at the limit of the limit. This is a symptom of a disorganized fiscal policy,” says MB chief economist.
