“From the government’s point of view, there is no extension,” says Paulo Guedes about emergency aid | Emergency help

In a virtual event promoted by an investment company, the minister said that there is political pressure for expansion and that the economic area is prepared to react “if there is a second wave” of Covid-19.

But, for Guedes, the disease “gave way” and “is going down”, so the aid would no longer be necessary because, according to him, the economy “is coming back strong.”

“The idea is that the emergency aid will end by the end of the year. The economy is coming back strong, the disease is going down. I’m not saying two or three weeks. I mean 1,300, 1,400 dead. per day, it dropped to 300, 250. Now, it seems to have returned to 350. It is a tragedy of immense dimensions, this epidemic that hit Brazil is terrible […]. Against the empirical evidence, there is not much argument. The fact is that the disease has subsided and the economy has returned with great force, “he declared.

According to a survey by the consortium of press vehicles based on data from state health departments, consolidated at 8 pm on Sunday (22), Brazil has a moving average of 484 deaths from Covid per day and in ten states the deaths are in increase.

“From the government’s point of view, there is no extension of emergency aid. Obviously there is a lot of political pressure for this to happen. Obviously there are a lot of people speaking in the second wave, etc. and we are prepared to react to it. Any empirical evidence, if there is empirical evidence, Brazil will once again have a thousand deaths, it will have a second wave effectively, we already know how to react, we already know the programs that worked best, ”said the minister.

The government began making emergency aid payments in May. Initially, they would go until July. Then they were extended a first time until September and a second until December. At the beginning, the value was R $ 600, but it increased to R $ 300 in the last installments.

According to Valdo Cruz’s blog, the political wing of the government once again defended the extension of emergency aid for two or three months in 2021 due to the lack of definition regarding the creation of a new social program.

On the 12th, Guedes stated that if there is a “second wave” of Covid-19 – which, for him, is not characterized – the extension would be “a certainty”. “If there is a second wave of the pandemic, it is not a possibility, it is a certainty,” he declared at the time.

The executive director of the Independent Tax Institution (IFI), a body linked to the Senate, estimates that a four-month extension of emergency aid, in the amount of R $ 300, for some 25 million people, would cost the public coffers around of R $ 15.3 billion.

For the IFIs, aid is important, but ways need to be found to finance it if the government and legislature decide to extend it again.

“The fiscal space on the roof [de gastos] it does not exist, it is too small, too small to make additional expenses. If the ceiling remains as is, you would need compensation for other expenses. And discretionary spending is already at a very low limit, ”said Felipe Salto, IFI’s executive director.

In his assessment, the emergency PEC -which seeks solutions for the preservation of the roof- should not advance this year, like the PEC of the federative pact.

• State and privatizations – At Monday’s conference, Paulo Guedes once again defended the sale of state-owned companies and denounced difficulties in carrying out a privatization program. “First we had to go to the Supreme Court and, for some internal reason, there were some doubts in some of our ministries. In our own ministry, there were also several important ones. Now, there was also a political agreement, apparently from the center-left, that we do not guide the privatization. That was very bad for us, ”he said.
• Interest and currencies – The minister also said that the economy is “healthier” with lower interest rates and a higher exchange rate. “We were in debt like a snowball and paying very high interest rates, including, with the exchange rate overvalued, a very perverse combination of two critical prices in the economy. The economy is much healthier. Because before, with interest at 10%, 12% and the exchange rate at R $ 1.80; R $ 2.20, R $ 2.80. The economy is much healthier if it has an interest rate of 2% and an exchange rate of R $ 5. Much better ”, said Guedes.
• New tax – The minister was asked about the creation of a tax on digital operations, which has been called the digital CPMF. Guedes said he was opposed to the tax increases, but said that to exempt the payroll it will be necessary “to have another tax base.” “So, as you can see, there are 17 sectors that have a very strong lobby. They want relief for themselves. Not for all Brazil […]. So if someone wants to release it, they will have to have another taxable base in order to release it. Because we are not going to increase those bases that are there. And that conversation was prohibited, ”he said.
• Tax Reform – Guedes defended the collection of the tax on dividends, having as compensation the reduction of corporation tax. “If the profit stays with the company, to become investment, job creation, innovation, taxation is lower. Now, it went, it went to the individual, who has money, who has a capital base, where there is financial wealth, and then they live on dividends. We have to pay. You have to pay taxes on dividends. What story is this? “, I ask.

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