(Reuters) -President Luiz Inácio Lula da Silva said this Monday that fiscal adjustment programs should not justify the reduction of social investments, and argued that the fight against poverty is the best economic stimulus that exists.
Addressing multilateral banks and donor countries during a speech at a meeting of the Council of Champions of the Global Alliance to Fight Hunger and Poverty, in Rome, Lula stated that available resources must be used to face what he called “real challenges facing humanity”.
“It is necessary to review priorities. Fiscal adjustment programs are not an end in themselves that justify reducing investment in human and social development”, defended the president in the Italian capital, where the headquarters of the United Nations Food and Agriculture Organization (FAO) is located.
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“There is no better stimulus for the global economy than the fight against hunger and poverty. Available resources must be mobilized to face humanity’s real challenges. When this happens, consumption increases, the market heats up and new cycles of development flourish,” he added.
Lula cited the recent approval by the Chamber of Deputies of the income tax exemption for those earning up to R$5,000 per month, to be offset by a higher income tax rate for those earning over R$600,000 per year.
“This tax progressivity will increase resources for financing essential public policies,” he stated.
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Despite Lula’s speech, the Ministry of Finance and the head of the ministry, Fernando Haddad, have repeatedly stated that the changes in IR are not revenue-generating and that they are fiscally neutral, implying neither an increase nor a reduction in revenue.
Later, Lula spoke at the opening session of the World Food Forum at the FAO headquarters in the Italian capital, when he criticized the trade protectionism of rich countries and defended that those who earn more pay more taxes.
“Barriers and protectionist policies from rich countries disrupt agricultural production in the developing world,” said Lula.
“We need to know if people are paying the right taxes for what they earn in the country.”
Earlier, Lula visited Pope Leo 14 in the Vatican alongside First Lady Janja Lula da Silva and, in a publication in X, said he had spoken with the pontiff about “religion, faith, Brazil and the immense challenges we have to face in the world”.
