Government retreats and must give up compensation to states to raise Auxílio Brasil to R$ 600

Less than 4 months before the presidential election, the assessment is that the ideal is to boost existing programs

The Jair Bolsonaro (PL) government wants to increase the minimum amount of Auxílio Brasil to R$600 and give up paying compensation to the states in exchange for them zeroing the ICMS rate on diesel and gas by the end of the year.

The president even announced the transfer proposal on June 6, but the diagnosis of the government and parliamentarians is that, as the measure would depend on the adhesion of the states, the impact could take time or not reach the end for consumers.

A PEC (proposed amendment to the Constitution) under discussion in the Senate set aside up to R$29.6 billion for compensation to state governments, but the measure faces strong resistance from governors and finance secretaries.

The replacement of the measures should be discussed at the meeting of leaders in the Senate this Thursday (23).

The new proposal is to pay, until the end of this year, an additional R$ 200 to beneficiary families of Auxílio Brasil, which today already receive a minimum of R$ 400. About 18.2 million families are in the program.

According to government sources, the measure pleases Bolsonaro and should not have the resistance of Minister Paulo Guedes (Economy), who already expressed a preference for an income transfer to low-income families in the event of any new measures against the rise in fuel prices.

The increment would have a cost of approximately R$ 22 billion. The amount is lower than the reserve for the states in the PEC, and it is not ruled out that the difference will be used to further increase Auxílio Brasil or boost Auxílio Gás, another measure that is under discussion in the package.

The government also intends to create a voucher of up to R$ 1,000 for truck drivers and, for that, it is articulating a state of emergency to circumvent electoral restrictions on the creation of new benefits in an election year, as revealed by the Sheet.

Bolsonaro is under pressure, in second place in the voting intention polls, led by former president Luiz Inácio Lula da Silva (PT) and has demanded solutions from his ministers to contain the rise in fuel prices.

Rising prices are seen as one of the factors that most threaten Bolsonaro’s reelection project. Boosting Auxílio Brasil would be a strategy to try to minimize the impact of inflation on the poorest families and also strengthen the program’s brand.

Auxílio Brasil was thought to be Bolsonaro’s social showcase, but the government is having difficulty getting the program’s new brand name among the population, which still closely associates it with Bolsa Família, one of the main banners of PT administrations.

as showed the SheetBolsonaro’s campaign identified the knots in Auxílio Brasil and prepared a strategy to try to make the brand stick with the population.

Raising the amount of aid is part of this context, as one of the findings was that the benefit was considered low compared to emergency aid, launched in 2020 to help vulnerable families amid the Covid-19 pandemic. The initial value of the benefit was R$ 600.

Despite the government’s willingness to inject more resources into Auxílio Brasil, the money could not be used to eliminate the waiting list for the program, as this would be a permanent expense, with an impact in the coming years, not only in 2022.

as showed the Sheetin May there was a waiting list of 764,500 families already qualified for the program, but who do not receive the benefit due to lack of funds within the spending ceiling — a rule that limits the advance of expenses to the variation of inflation.

Source: Leaf