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The government raises the budget cut to 13.5 billion Brazilian riyals to increase civil servants - 05/27/2022 - Mercado

The government raises the budget cut to 13.5 billion Brazilian riyals to increase civil servants – 05/27/2022 – Mercado

The government will increase the size of this year’s budget cut to accommodate the new federal employees’ amendment. After last week’s announcement of R$8.2 billion worth of scissors, the value should rise to R$13.5 billion.

The folders most affected by the resource blockade should be education, science, technology and health.

And the technicians decided to put in another protective block worth 5.3 billion Brazilian riyals to absorb the salary increases. The values ​​have not yet been officially released and may change until the decree on the subject is published in the Official Gazette of the Federation.

The larger-than-expected cut comes after President Jair Bolsonaro (PL) announced that although there have been studies to grant privileges to police officers in varying increments, the government tends to grant a 5% readjustment to public servants this year.

“There is criticism and threats to strike from other sectors as diverse as possible. [Então] What’s the trend “It’s 5% for everyone,” Bolsonaro said.

However, as he found it boundthe Protective Reserve should include space for potential differential adjustment for members of the PRF (Federal Highway Police) and Depen (National Prison Service), lower-paying jobs than the PF (Federal Police).

Bolsonaro wants to grant a larger revamp to the security professions to fulfill his promise to the group. The proposal that has gained the most traction is a restructuring to match the salaries of PRF agents with that of the PF, as well as a more significant increase for Depen.

According to government technicians, the 5% linear adjustment for civil servants and security company members’ reserve should amount to R$6.1 billion – a revised figure in relation to the initial estimate of R$6.3 billion. Since there is a reserve of R$1.7 billion expected in the budget, the net reduction for the civil service should be R$4.4 billion.

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Although technicians understand that the government can turn over readjustment projects without the funds reserved in the budget, leaving the new cut for July could make the task of reallocating resources more difficult. This is because in the middle of the year, the implementation of ministries’ expenditures is already at a more advanced stage.

There was also a new revision of other expenses in the budget, adding to the blockage.

The reduction will not spare the Ministry of Education, which will receive scissors in the amount of R$3.2 billion. The blockade also affects all entities associated with the wallet, such as federal institutes and universities.

The science and technology portfolio must also suffer. The National Confederation of Industry (CNI) issued a note protesting the cut of R$2.9 billion in the region, calling the decision a mistake.

CNI also says the reduction is illegal because it contravenes provisions of Supplementary Law 177/2021, which prohibits emergency resources from the FNDCT (Science, Technology and Innovation Funding Source). “This resource is sealed and the government cannot prevent it under the pretext of not exceeding the public spending ceiling,” the entity says.

The Ministry of Health must suffer scissors worth R$2.5 billion. Reductions fall on discretionary funds, which include financing and investments.

The government has until next Monday (30) to publish the budget programming decree, a document that will formalize the cuts in ministries.

Among government technicians, significant pressure is expected over the weekend. Until the figures are published in the Official Gazette, ministers are expected to try to reverse the losses in their portfolios.

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Bills making the amendments official are also due to be presented next week.

In order not to violate the LRF (Financial Responsibility Act), the president needs to send the proposals in, get them approved in the National Congress and sanction them until the beginning of July — when the legal ban on personnel overheads was recently 180 days off.

The cut of R$ 8.2 billion was announced last Friday (20), in light of strong growth in mandatory expenditures, such as court rulings, agricultural subsidies and benefits such as a salary bonus.

Preliminary estimates of technicians predicted an even larger reduction of R$15 billion, specifically to retain the resources needed for readjustment, as shown in bound. But the political decision at the time was to split the cuts in installments and avoid stricter restrictions on ministries at this time, which have now ended up being reviewed.