Public Government Decree with containment of R $ 31.3 BI; PAC and amendments are more affected

One of the main showcases of President Luiz Inacio Lula da Silva’s government, the Growth Acceleration Program (PAC), was one of the most affected by a containment of R $ 31.3 billion in the budget, with a freezing of R $ 7.6 billion in resources. Parliamentary amendments had a containment of R $ 7.1 billion.

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The detail of the blockade-of R $ 10.6 billion-and contingency-of R $ 20.7 billion-was published on Friday night, 30, by the government in extra edition of the Federal Official Gazette (DOU).

According to the document, the PAC suffered a contingency of R $ 5.04 billion and a block of R $ 2.6 billion. Already the amendments had R $ 4.7 billion contingent and R $ 2.4 billion blocked.

Also read: Government announces a containment of R $ 31.3 billion in the budget and targeting parliamentary amendments

What is the difference between block and contingency?

In contingency, the government freezes expenses when there is frustration of revenues in order to comply with the fiscal target (balance between income and expenses, not to mention debt interest). For this year and 2025, the goal is to zero the deficit of public accounts.

Already the block is performed to comply with the limit of expenses of the tax framework. Thus, when there is an increase in mandatory expenses (such as retirement, for example), the government blocks non -mandatory expenses (such as costing and investments) to compensate.

According to the decree, in addition to PAC and amendments, ministries were affected by the containment of expenses. The largest reductions:

• Ministry of Cities: R $ 4.29 billion
• Defense: R $ 2.59 billion
• Health: R $ 2.36 billion
• Social Development: R $ 2.12 billion
• Transport: R $ 1.49 billion
• Farm: R $ 1.41 billion
• Integration and regional development (R $ 1.3 billion).

The Ministry of Education was not the target of cuts and had its budget preserved.

According to planning, the agencies and ministries affected will have until next Friday, 6, to indicate the schedules and actions to be blocked.

In the context of parliamentary amendments, the process and the deadline are specific, as they involve consultation with the Legislative Power. “Thus, the distribution of the containment of amendments contained in the decree may be modified, depending on the prioritization of the legislature,” says the folder.

The total containment of R $ 31.3 billion was announced by the government last week. The blockade of R $ 10.6 billion was motivated by the increase in mandatory expenses, while the contingency, of R $ 20.7 billion, is intended to ensure compliance with the target of primary result.

For this year, the government promises to achieve the zero primary result goal, but there is a margin of tolerance that allows a deficit of $ 31 billion – or 0.25% of Gross Domestic Product (GDP).

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In addition to containment measures, the government updated the rules on budget execution to 2025, with greater limitation on the release of resources throughout the year.

The decree determines, attached, three periods for the limitation of commitments (the decision to limit the spending of the ministries month to month is called phasing): until July, until November and until December. “The phase aims to establish rhythm of execution compatible with subsequent cycles of reevaluation of revenues and expenses,” says the Ministry of Planning.

The measure represents a restriction of R $ 92.2 billion until July (considering the phase of commitment limits of R $ 60.0 billion, plus a containment of R $ 31.3 billion); and from R $ 50.9 billion to November (considering the phase of commitment limits of R $ 19.5 billion, plus a containment of R $ 31.3 billion). In December, the phase is no longer effect, leaving only the full value of containment.