Lula will abolish the ceiling to spend more

Lula will abolish the ceiling to spend more

Photo: Ricardo Stuckert/Public Photos

The PT promises to abolish the spending ceiling, the Fiscal Responsibility Law and the golden rule.

The responsible for the PT program for the economy, Guilherme Mello, told Valor that there is consensus in the party on the need for a new fiscal rule:

“Our idea is a spending rule that will not be in the Constitution. A rule that defines spending every four years, announced in a transparent way, with sub-ceilings, approved in Parliament, that has escape clauses. We have to make a rule that allows the elected government to decide. We have to make a rule that allows the elected government to decide. If he is liberal, he can say that real expenditure growth will be zero. There may be a limit to setting that goal. The LRF was that, an important fiscal anchor, for a long time. Today it is not anymore”.

He also said that the biggest state expenditure will be financed with tax increases:

“There will be a fiscal expansion. Many people say that it was enormous during the Dilma government, but the real growth in expenditure was much smaller than that of the Lula government and also smaller than that of the FHC government (…). We have a view that it is possible to have a better revenue trajectory, with tax reform, if we manage to reactivate growth, employment, income, credit. The State will have a more direct role, whether in spending or induction (…). Lula himself has said that it is necessary to put the rich on the Income Tax. Taxing profits and dividends”.

“We do have to rethink Petrobras’ pricing. I’ve already participated in some discussions. One possibility is to take the cost of production and put a profit margin on top, which could be the average for the sector”.

Jair Bolsonaro ruined Brazil. Lula will strive to be even worse.