May 28, 2023

Labor calls on Haddad to explain the financial framework and propose a shift in health and education-politics

BRASILIA – The Workers’ Party summit is trying to frame the Minister of Finance, Fernando Haddad, for changing the proposed fiscal framework and plan to link constitutional expenditures on health and education to a new rule. On the same day that President Luiz Inácio Lula da Silva hit the bass drum on the 100 days of judgment Defending Haddad from the criticism, the National Directorate of the Labor Party decided to invite the minister to a “debate process” because he was skeptical about the project, to be presented to Congress this week.

Labor is pressing the Treasury holder to demonstrate, for example, how a zero primary deficit in 2024, as foreseen in the new Fiscal Linkage project, can be leveled out with economic growth and job creation. In addition, the party leadership wants details of how the minister intends to raise revenues by R$150 billion to put the proposal on its feet. The idea is for Haddad and members of the economic team to meet party leaders and economists, as well as Labor seats in the House and Senate, later this month.

It continues after the announcement

Although the minister appreciates that the plan to link health and education expenditures to a per capita spending system opens the way for expenditures of this kind to be less vulnerable to government revenues, the Labor leadership considers this model to be poor. “I think it would be very difficult to pass something in the PT that shifts the floor of 15% of current net revenue for health and 18% of tax revenue for education. It is a historic commitment for Labor to its base.” Estadao Vice Lindbergh Farias (PT-RJ).

When diagnosed with parliamentarians and party leaders, the framework package, as it were, has the potential to cause a brake on the economy, leading to an increase in unemployment. “(…) We support President Lula’s firm stance against the suicidal monetary policy imposed by the Central Bank Directorate and which comes from the previous government,” reads the official note of the National Directorate of the Workers’ Party, which was approved on Monday, the 10th, about 100 days after Lula’s government. Moreover, the document refers to the financial anchor. He does not quote Haddad, but he warns of what should be a priority for economic policy.

“It is with this in mind that we salute the end of the disastrous spending cap law and prepare for discussion, within the party, Congress and society, on proposals for new fiscal rules and tax reform, once fully recognized, reaffirming that the priority of economic policy is development, re-industrialization and growth with job generation.” and opportunities,” PT note highlights.

At Monday night’s meeting, Labor MPs also expressed concern about the proposed financial framework and assessed that the project, if not well linked, could lead to a political crisis. “The story of changing the landscape of education and health will remain constant,” Lindbergh said. Haddad should explain the framework and try to convince (the people). I think he should go to several parties.”