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Haddad Admits That The Government Does Not Cut Almost Anything From The Budget Without Congress And Says That The Fiscal Framework Limits Fiscal Expansion; Bets On Tax Reform As Legacy
The Finance Minister, Fernando Haddad, admitted in an interview on the program Canal Livre (Band) that the government cannot cut almost any spending without the approval of the National Congress. According to him, this dependence on the Legislative shows the real limitation of the Executive over the public budget.
Haddad also highlighted that the fiscal framework, created in 2023 to replace the spending cap, introduced rules that prevent significant increases in expenditures. In the minister’s view, this shows that the country is going through a different moment than previous managements, when the fiscal impulse was greater.
The Weight of Congress on the Budget
According to Haddad, practically all relevant cuts need to go through the scrutiny of lawmakers. This means that the Executive has little autonomy to change mandatory expenses, which represent the largest part of the budget.
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This dependence on Congress reflects in the political negotiations and the priorities of each party, which often limits the speed of economic changes. For Haddad, the debate on spending needs to be more realistic, as the government’s room for maneuver is smaller than part of public opinion imagines.
Fiscal Framework and Limits to Growth
The minister defended that the fiscal framework should not be seen as an absolute brake, but as a necessary rule to maintain balance. He argued that there is no uncontrolled increase in expenses, precisely because the current system imposes restrictions on expansion.
Thus, the government needs to find ways to increase revenue without raising taxes broadly, which explains the bet on measures such as cuts to tax benefits and debt renegotiation programs.
State-Owned Enterprises and Unequal Competition
During the interview, Haddad mentioned the Post Office as an example of a state-owned company that suffers pressure from the private sector. According to him, private companies take the “prime” of the market, while the state-owned enterprise has to take on less profitable routes and services.
This situation reinforces the challenge of keeping state-owned enterprises competitive in strategic sectors while they must fulfill social functions that do not attract private interest.
Betting and Economic Activity
Another topic raised by Haddad was the betting market. The minister criticized Congress’s decision to authorize mass online betting, known as bets, while vetoing the creation of physical betting houses, which, according to him, could generate more jobs and stimulate the local economy.
In the minister’s view, the current legislation creates an imbalance: it collects taxes from foreign digital platforms but fails to incentivize physical businesses that could generate income in Brazil.
Tax Reform as Legacy
When asked about what his main mark will be at the helm of the Finance Ministry, Haddad was direct: “the tax reform, I would say 200%”. The project, approved in 2023 after decades of discussion, simplifies consumption taxes and still needs to be regulated by 2033.
According to the minister, the reform will be decisive to correct historical distortions of the Brazilian tax system, reduce bureaucracy, and improve the competitiveness of national companies.
The statements of Haddad reveal the limits of the Executive in fiscal management and reinforce the central role of Congress in decisions about public spending. At the same time, they show that the minister is betting on tax reform as a legacy for the country.
And you, do you think the lack of autonomy of the government to cut expenses is positive, for ensuring more political balance, or negative, for blocking urgent adjustments? Leave your opinion in the comments — we want to hear from those who live this in practice.
“ÇEI”, se ele fosse um ministro da Fazenda de verdade, e não tivesse um boquirroto **** como presidente da República, alguém que se importa de verdade vom o povo e a nação, que governasse com pragmatismo e fosse um líder de verdade, isso não estaria acontecendo, mas o que temos? Um presidente ****, sem credibilidade, vingativo, que só pensa e fala no ex presidente, além plano de governo, refém do congresso, que só negocia na base do toma lá, dá cá, um presidente fraco, ****, aí está, o Brasil num buraco cada vez mais fundo. Tudo incompetência dele e do ex presidiário, pois é…