Aid of BRL 600 in 2023 would cost BRL 50 billion and would make investment unfeasible

Bolsonaro said he had already talked to the Minister of Economy, Paulo Guedes, for the readjustment of the aid from R$ 400 to R$ 600.

The promise made by the president Jair Bolsonaro to keep the Brazil aid at R$ 600 next year would have an impact of more than R$ 50 billion and would greatly reduce the space for other expenses, such as investments and funding for the public machine.

At the convention that formalized his candidacy for reelection to the presidency of the Republic, held this Sunday, 24, in Rio, Bolsonaro said he had already talked to the Minister of Economy, Paulo Guedes, so that the readjustment of the aid from R$ 400 to R$ 600, on the eve of the election, is maintained next year. On Saturday, at an event in Vitória (ES), the president had already signaled that he could keep the value. “Brazil aid of R$ 600 will be maintained from next year. And I am sure, we will have deflation this month,” he said.

Technicians heard by Estadão/Broadcast, however, said that the value is not under discussion in the elaboration of the Annual Budget Law for 2023, which has to be sent to the National Congress by August.

A source pointed out that the space for discretionary expenses, which include investments and other non-mandatory ones, is just over R$150 billion. The increase in Auxílio Brasil beneficiaries alone, with the program at R$ 400, raised the cost of the program next year to around R$ 106 billion.

If the amount of BRL 600 becomes permanent, the account will reach BRL 155 billion, consuming all the space for discretionary spending and greatly limiting other expenses, which include investments and machine costs, such as energy and water, among others. others.

To increase aid in an election year, the government approved a Proposed Constitutional Amendment (PEC) that established a state of emergency, alleging high fuel prices.

Leader in the polls, former president Luiz Inácio Lula da Silva (PT) has also said that he will keep the aid at R$ 600 if elected.

RISKS AHEAD

As Auxílio Brasil is a mandatory expense – that is, one that the government has a legal determination to comply with – its increase will result in a compression of discretionary spending, unlike investment and current expenditures, which can be postponed.

As the Union budget is already very rigid and more than 90% of expenses are mandatory, an even greater reduction in these expenses could put the administration of the public machine at risk, even leading to what is called a “shut down” – when there is no money for basic expenses and essential services are paralyzed.

According to sources, even if the government did away with the spending cap – a rule that limits expenditure growth to the previous year’s inflation – there is a limitation on the tax collection side. The only way to close the account would be a large increase in public debt to cover all these expenses. “The debt would explode,” said one government official.

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