Increasing public spending on social benefits is an urgent demand in Brazil today, but the lack of clarity about the source of funding could undermine the elected government’s policy objective, argues Samuel Pessôa, economist and head of economic research at the Julius Baer Family Office.
“Increasing public spending on measures to combat poverty without these measures being clearly established is giving with one hand and taking away with the other. And the financial market is reacting to this problem, which is not the extra spending, but the financing conditions for these expenses are not clear”, he told CNN this Sunday (20).
The moment, according to the expert, calls for a deeper discussion about the size of the State that society wants to have and the way it prefers to direct its revenues.
“If we want more money for Auxílio Brasil, which will be renamed Bolsa Família, and if we think it is important that the benefit be BRL 600 per family and that there be BRL 150 more for every child, what it makes sense, all this costs R$ 75 billion more per year”, he says.
“So, we have to look inside the budget and check if there are spending control measures that reduce other items of public spending or if it is necessary to increase the tax burden by R$ 75 billion so that we have tax revenue to finance this spending”.
*Watch the full interview in the video.
*Posted by Ligia Tuon
Source: CNN Brasil
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