TCU president defends BC’s firm look at fiscal rules

The acting president of the Federal Court of Accounts (TCU), Minister Bruno Dantas, said this Saturday (26), during the Esfera Brasil Forum, in Guarujá (SP), that the Central Bank needs to have a “firm look” at the tax issue in Brazil.

“The Central Bank will have a firm look at what is happening. If we somehow deteriorate, even if unintentionally, the fiscal rules, the immediate effect will be for the Central Bank to raise interest rates”, said Dantas at an event promoted by Esfera Brasil.

The president of the Central Bank, Roberto Campos Neto, and vice-president-elect Geraldo Alckmin also participate in the panel.

On the panel, Bruno Dantas criticized the high ratio of the public debt to the Gross Domestic Product and highlighted the difficulty in making the public budget fit in the GDP.

“It’s no use for us to dream if we’re not producing enough wealth to pay for these expenses”, he pointed out.

“The fiscal responsibility agenda is crucial, perhaps spending efficiency is more important,” he added.

Fiscal and social responsibility

Bruno Dantas endorsed the thesis that there is no dichotomy between fiscal and social responsibility.

At the same event, the elected vice-president of the Republic, Geraldo Alckmin (PSB), defended fiscal responsibility and stated that maintaining respect for public accounts is not “incompatible with social advances”. “Anyone who bets on fiscal irresponsibility will make a mistake,” said Alckmin.

The debate on the subject took shape after the president-elect, Luiz Inácio Lula da Silva (PT), questioned the control of spending on the well-being of the population to protect public accounts.

Leaders of the transitional government came out in defense of the PT and claim that he never, in eight years in charge of the country, made an opposition between fiscal and social responsibility, but combined the two things.

“Fiscal responsibility is the framework on which we are going to build the building. We cannot build a building without a foundation, we cannot talk about public spending if we do not have balanced accounts”, declared Dantas at the event.

According to Dantas, at TCU, there are two main concerns: responsibility with fiscal rules and efficiency with public spending.

When citing the feasibility of withdrawing Bolsa Família from the spending cap, as the elected government intends, the minister provoked: “There is a question that needs to be asked to this audience of businessmen, of people: to know if the budget fits into the GDP. We need to talk about wealth distribution, we need to talk about wealth generation”, he declared.

With difficulties to implement the Proposal for Amendment to the Constitution (PEC) of the Transition, which intends to remove the Bolsa Família from the spending ceiling and open fiscal space for other social projects, the elected government is considering adopting another path: in the first days of government, edit Provisional Measure opening extraordinary credit.

Unite Brazil

Also in the conversation circle, businessman Abilio Diniz stated that the main challenge for the government at this moment is to unite the country and show that it governs for everyone.

“We have to make the country grow, create jobs with growth, generate income and inclusion”, said the businessman, for whom it is necessary to combat hunger and overcome deficiencies in the public machine to also reduce food waste.

“It’s no use wanting to create jobs by increasing the state machine”, defended Abílio Diniz, who highlighted the international and Treasury reserves when commenting on the high level of the debt/GDP ratio.

*With information from Estadão Content