Budget reform urgent, say tax experts
- May 31, 2022
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Academics, economists, political leaders and lawyers specialized in public accounts that were heard say, in unison, that a concrete reform of the budget is needed.
Specialists in the tax area say there is an urgent need for a budget reformin the face of recent cases, such as the purchase of hundreds of garbage trucks with prices inflated by the federal government. Resources that should finance public policies for those who need it most are directed to the electoral strongholds of the Centrão and distributed without any technical criteria, which opens gaps for corruption schemes.
Academics, economists, political leaders and lawyers specialized in public accounts heard by Estadão affirm, in unison, that a concrete reform of the budget is needed. Changes to facilitate the application of federal resources to what is most important, however, face obstacles such as “very short-term” “parochial” interests and electoral dribbling by the Legislative and Executive in the mechanisms of control of public money.
The distribution without technical criteria of garbage trucks, tractors, school buses and the authorization to build new schools while there are 3 thousand works stopped in the country – cases revealed by Estadão -, were strengthened with the secret budget. The review of this method of allocating resources without transparency, also revealed in newspaper reports, is one of the main challenges facing the country in terms of budget, analysts point out.
The interim executive director of the Independent Tax Institute of the Senate of the Senate (IFI), Daniel Couri, draws attention to the excess of provisions. Each parliamentarian can present 25 individual amendments, an instrument that can be defined under electoral criteria. “What happens in Brazil has no parallel in any other country,” he said. “You have thousands of amendments being tabled without strategic direction, without following specific priority or thematic guidance.”
He points out that the “decision fragmentation” and the lack of “strategic orientation” hit the investments, which are already small. “In addition to the reduction in investment, you have loss of quality,” he said. “A clear example is that of the works stopped and new schools being built where others could be completed.”
Lawyer Romero Arruda, a budget advisor working in the Joint Committee on Plans, Public Budgets and Congressional Oversight (CMO), argues that the Legislature should take into account the technical notes of various bodies that indicate priorities for resource allocation. “Brazil needs to admit that it lacks public policy analysis and, when it manages to analyze it, with technicians from various government agencies or support from the TCU, for example, the conclusion almost always tells a story of poor results, either due to lack of support of politics in the long term, or due to wrong planning”, he said.
In the opinion of Élida Graziane, attorney for the Public Ministry of Accounts of São Paulo and professor at FGV, a regulatory reformulation of public finances is urgent so that public spending planning reflects national priorities. “Unfortunately, we are back to living under the aegis of yet another cycle of coronelismo, hoe and vote: safe of graces in the secret budget and power of doom against subnational entities and against the rationally planned funding of fundamental rights,” she said.
The misuse of the budget affects the structure of Brazil’s social fabric. Doctor in Law from Uerj, Irapuã Santana warns that the budget should apply resources to combat racial inequality. “The fiscal policy adopted by the Brazilian State is responsible for the framework of racial inequality, while the State’s failure to adopt public policies to combat these inequalities constitute violations of the constitutional pact”, he pointed out.
In December, Chamber Budget consultants Hélio Tolini and Paulo Bijos formulated a project to rationalize the use of parliamentary amendments, restricting them to the permanent committees of the Chamber and Senate.
In the proposed model, a suggestion for the construction of a school, for example, would be presented and debated in the Education Commission. And the limit for amendments would be linked to the total available for non-mandatory (discretionary) spending. “With the greater importance of the commissions and a new model, we could qualify the allocation of amendments and define priorities”, he said.
The reform proposed by both is based on a tripod: spending rule, medium-term planning and reviewing priorities from year to year. The consultants’ study gave rise to a Complementary Law Project, PLP nº 25 of 2022, presented by federal deputy Felipe Rigoni (União Brasil-ES). The consultants also formulated a Proposed Amendment to the Constitution (PEC).
Political scientist Beatriz Rey, who studies the functioning of the US Legislature, explains that in the United States, each deputy may present 15 amendments this year, with variable amounts and within specifications. “Each deputy opens a kind of selection process, in which various entities from that electoral district apply, and then the proposals with the greatest socioeconomic impact are selected,” she said. “In the proposals, congressmen must attach documents proving that neither they nor their families have an economic interest in the project.”