Bolsonaro’s government plan should provide for the resumption of funds, say team members

The government plan being prepared by the command of the campaign for the reelection of President Jair Bolsonaro (PL) foresees the creation of a fund to leverage resources for public investments and the resumption of the Fund to Combat and Eradicate Poverty, say members of the economic team.

The “National Reconstruction Fund”, as it has been called by the president’s allies, would aim to restore the capacity for public investment.

According to the Fiscal Policy Observatory of the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV), in 2021 government investment totaled 2.05% of Gross Domestic Product (GDP), the second lowest index in the historical series started in 1947.

In relation to the Fund to Combat Poverty, the idea is to guarantee resources for social investments.

The fund was created after a constitutional amendment by the then senator Antonio Carlos Magalhães in 2000 and regulated in 2011. It is supplied by states and municipalities from a kind of additional rates of the Tax on Circulation of Goods and Services (ICMS). Members of the campaign’s coordination are considering reformulating it.

There is still no clarity as to how these funds would be supplied. One possibility is that it will be with resources from the sale of state-owned companies, even as a way of convincing Congress to embrace a privatization agenda.

In the main opposing campaign, that of ex-president Luiz Inácio Lula da Silva (PT), the resumption of public investments and the priority of a social agenda have been debated as emergencies.

Debate

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