budget

NEWS IN ENGLISH – Draft LDO allocates R$995 billion for PAC2

allen — Wed, 18 Jul 2012 14:05:58 +0000

Stênio Ribeiro Reporter Agência Brasil

Brasília – The draft bill of the 2013 budget guidelines (“Lei de Diretrizes Orçamentárias – PLDO”) maintains the government’s target of spending (“meta governamental de investir”) R$955.1 billion in the second phase of the Accelerated Growth Program (“PAC2’) between 2011 and 2014.

According to the spread sheet (“planilha”) that is part of the draft bill, R$127 billion was executed last year with the result that R$828.1 billion will have to be spent this year and in 2013 and 2014.

However, the big numbers were projected by the government’s economic team last April, that is, in a much more optimistic environment where, according to minister of Finance, Guido Mantega, domestic demand was “robust” and the Ministry of Finance official forecast for GDP growth at that time was 4.5%.

Since then, economic growth forecasts have been cut in half as consumption levels have fallen due to family indebtedness.

In spite of a different macroeconomic scenario, the Congress approved a PLDO with few changes in the government’s grand targets. The goal of a primary surplus of R$155.9 billion, or 3.1% of GDP, stands (the executive branch including the Social Security system (União”) will be responsible for economizing R$108.1 billion, or 2.15% of GDP).

The bill does admit a possible future reduction of the primary surplus due to changes in net public debt as a percentage of GDP. In 2011, the ratio of debt to GDP was 39.1%. The government has said it wishes to reduce that to less than 30% by 2014.

For 2013, the draft bill forecasts primary revenue of R$1.226 trillion (24.39% of GDP) with primary outlays of R$1.118 trillion (22.24% of GDP).

Allen Bennett – translator/editor The News in English

Link - LDO mantém meta de investir R$ 955 bilhões no PAC2 de 2011 a 2014

NEWS IN ENGLISH – Lack of agreement on budget may hold up parliamentary recess

allen — Mon, 16 Jul 2012 14:29:17 +0000

Ivan Richard Reporter Agência Brasil

Brasília – Congress is supposed to go into recess this week, but without an agreement on the Budgetary Guidelines Law (“Lei de Diretrizes Orçamentárias – LDO”), that will not be possible [both the recess and the need to pass the LDO before the recess are in the constitution].

Opposition parties, led by the DEM, with support from the PDT, have been obstructing votes, demanding the liberation of congressional earmarks (“emendas parlamentares”) and late payments (“restos a pagar”) that have been pending since last year.

The final report (text) of the LDO was presented by senator Antonio Carlos Valadares (PSB-SE), but has to be approved by the Joint Budget Committee and, after that, in a floor vote (“plenário”).

Last week, leaders of the government and the opposition attempted to reach an agreement that would permit votes on the LDO and two temporary measures (“medidas provisórias”) that are part of a stimulus package for the manufacturing sector.

Because of the impasse, the president of the Chamber of Deputies, Marco Maia (PT-RS), has convoked extraordinary sessions for today and tomorrow (Monday and Tuesday, July 16 and 17) and promised that he will not accept absences without good excuses (“justificativas procedentes”).

According to Maia, if the temprorary measures are allowed to expire the industrial sector will have losses of R$10 billion (the measures reduce taxes).

The opposition accuses the government of using earmarks as “election tools” (“instrumentos eleitorais”) and calls on the government to keep a promise they say was made to release R$1 million in earmarks for projects in the area of health to each member of Congress, plus an additional R$1.5 million for other projects, besides the restos a pagar.

“We are not demanding anything or making any proposals. The government said they would do all this, and it is the government that has not kept its word,” declared the vice leader of the Dem, deputy Ronaldo Caiado.

Allen Bennett – translator/editor The News in English

Link - Votação da LDO ainda não tem acordo e pode atrasar recesso parlamentar

NEWS IN ENGLISH – Congress approves Budget Guidelines Law (“LDO”)

allen — Thu, 14 Jul 2011 13:51:50 +0000

Marcos Chagas Reporter Agência Brasil

Brasília – A Budget Guidelines Law for 2012 was approved in Congress yesterday. It sets the minimum wage for next year at R$616.34 and orders a real adjustment (above inflation) in payment benefits for Social Security (“INSS”) pensioners and retirees.

According to the president of the Senate, and former president, Jose Sarney (PMDB-AP), “While in Europe they are cutting back on entitlements (“Estado Social de Direito”), here in Brazil and other developing countries, we are going in the opposite direction as we guarantee more social rights.”

The LDO bill approved preserved the administration’s macroeconomic parameters: GDP growth this year will be 4.5% and 5% in 2012. The inflation target, as measured by the Broad Consumer Price Index (“IPCA”), is 5% this year, and 4.5% in 2012.

The bill also allocates money for congressional earmarks (“emendas individuais de deputados e senadores”), along with what the executive branch requested for its Accelerated Growth Program (“PAC”) and social assistance projects (reduction of extreme misery – “Brasil Sem Miseria”).

With regard to the primary surplus target, the LDO sets it at R$139.822 billion for the Union, states and municipalities, of which R$96.973 is to come from the federal government. However, Congress restricted the amount that can be used in the PAC to R$40.6 billion.

The approved LDO limits the nominal deficit to 0.87% of GDP and calls for current expenditures – payroll outlays, for example – to be less than any increase in government spending (“investimentos”).

In the case of public works halted due to watchdog investigations (“Tribunal de Contas da União – TCU”), the LDO requires examination of the situation by the Congressional Joint Budget Commission within 40 days of the conclusion of auditing. Furthermore, any such suspensions can only be cancelled by the commission.

Finally, the LDO approved by the Congress also prohibits the executive branch from executing spending projects before they are approved in the General Budget (“Orçamento Geral da União”) [note: the LDO sets guidelines, and as such is a sort of preliminary look at what the final budget will look like; the General Budget is the real budget and is what really counts. It will go to Congress for approval later in the year]. The LDO bill the executive branch sent Congress permitted spending on PAC projects and allowed allocations to state-run enterprises until December 31 without budgetary approval. [this conflict between the executive branch and the legislature will have to be ironed out in the General Budget]

Allen Bennett – translator/editor The News in English

Link - Aprovada no Congresso, LDO mantém salário mínimo de R$ 616 para 2012