Economic experts say there is no fiscal space for further cash transfers
08/16/2022
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Proposal will compete for the narrow fiscal space of the 2023 budget with other demands — Foto: Marcello Casal Jr./Agência Brasil
The idea of extending the handouts for taxi and truck drivers beyond December, set in motion on Monday by Labor Minister José Carlos Oliveira, has little chance of moving ahead, as far as the government’s economic team is concerned.
If it leaves the field of ideas to be discussed concretely, the proposal will compete for the narrow fiscal space of the 2023 budget with other demands: the maintenance of the cash-transfer program Auxílio Brasil at R$600 (in theory, the value returns to R$400 next year), pay raises for civil servants, the adjustment of the Individual Income Tax (IRPF) by inflation, and the extension of the cut of federal taxes on fuel.
It is an expensive program that will consume up to R$7.4 billion with payments in the second half of this year alone. This is more than the amount earmarked for investments in the Ministry of Infrastructure during the whole year.
The announcement Monday of a new cut in gasoline prices and the recent reductions in diesel prices make it hard to justify, from the economic and social standpoints, the maintenance of this benefit, a source said. Constitutional Amendment 123, which created this aid and allowed its payment on the eve of elections, is based on an emergency framework created by the Russia-Ukraine war.
Despite the decline in fuel prices, the idea of extending the tax exemption is still under analysis. According to officials, however, it would not be just like today, with costs around R$50 billion a year. Instead, there would be a version more focused on poor families. If the tax cut is kept only for diesel, biodiesel, and cooking gas, as advocated by Economy Minister Paulo Guedes, the bill will be about R$18 billion.
When saying that he “takes kindly” to the perpetuation of the benefits to taxi drivers and truckers, the Minister of Labor praised Mr. Guedes’ work in controlling the creation of new programs. He recalled, on the other hand, that the payment of benefits to the most vulnerable has been done by several countries.
When questioned, he also evaluated that the “price context” still requires government support for both work categories.
*By Lu Aiko Otta — Brasília