Civil society hands proposals to 2010 budget rapporteur in Brazil

The FBO is a “network made up of 57 civil society entities which defends public budget transparency, grassroots participation in decision-making spaces, and budgetary priority for social policies,” said Sarah Reis. An advisor to the Feminist Center for Studies and Advisory Services (CFEMEA), she opened the event and spoke on behalf of the Forum.

The FBO analysis was presented by Luiz Mário Behnken, from the Rio de Janeiro Popular Budget Forum and also a member of the Rio de Janeiro Regional Economy Council. This study was written by economists Evilásio Salvador, Brasília University professor, and Rodrigo Ávila, from the Citizens’ Debt Audit.

Behnken summarized the main points in the FBO study: “correctly identifying public revenues that finance the social security budget, demonstrating the inexistence of deficit in its funding; increasing funding for expenditures with public policy councils, as they promote society’s participation in managing and overseeing public policies; diminishing the expenditures with public debt interests and amortization, which is done to the detriment of social security; and putting an end to the delinking of federal revenues (DRU), which reduces funds for social policies by 20%.

The FBO representative warned Deputy Magela of the need for more budgetary transparency and clarity, in addition to social participation. He demanded that social security funds (health, pensions, social assistance) be actually allocated to those areas as mandated by the Constitution. “Today, funds that should have been destined to social security are sent to the fiscal budget,” denounced the FBO representative.

Behnken noted that, according to the FBO study, a major part of the funds destined to social security are in fact allocated to areas outside the funds defined by the Constitution, thus making it impossible for public policy councils to monitor how those appropriations are applied.

Sandra Quintela, representing the Jubilee South Network and the Citizens’ Debt Audit, stated that the amount of public funds allocated to the payment of public debt interest and amortization to the detriment of social policies was scandalous. “The 2010 PLOA includes R$ 278 billion (around US$ 159.77 billion) to pay debt interests and amortizations, said Quintela. The activist urged society to participate in the work of the Parliamentary Commission of Inquiry (CPI) – the debt CPI. Its public hearings are taking place at the Chamber of Deputies.

The 2010 PLOA rapporteur Geraldo Magela (PT-Federal District) explained the difficulty of estimating government revenues – according to him, they have declined this year. Federal Deputy Magela affirmed that estimated revenues are not sufficient for reallocations to relevant expenditures, and he cited the example of individual budget amendments. “There is a gap of R$ 22 billion (about US$ 12.64 billion),” he said.

Magela explained why pension adjustments were not included in the 2010 Budget Legislative Proposal. “There is not yet an agreement on pension adjustment for the next year. That is why it was not included in the 2010 PLOA,” he stated.

The rapporteur asserted that there was no margin to re-estimate revenues this year. In the case of parity-representation councils, the budget rapporteur stated that they could receive funding throughout the year. The Deputy also affirmed that he intends to cut back funds for nuclear submarines included by the Executive. “In my report some areas will not be touched, i.e., social policies, the Growth Acceleration Program (PAC), and the adjustment for pensions and public servants’ salaries will not suffer cutbacks,” he added.

Magela voiced support to reduce the primary surplus, used by the government to pay public debt interests. However, the rapporteur explained that it was impossible to change this, because the target had already been established by the Budgetary Guidelines Law (LDO) voted in midyear. The deputy opposes committee and caucus amendments. “Only individual amendments have clearly identified authors,” he asserted referring to the easy identification of those amendments in case of any irregularity – although he also admitted that individual amendments could favor political clientelism.

The Chamber of Deputies Participatory Legislation Committee (CLP) chairperson, Deputy Roberto Britto (PP/Bahia), made an appeal requesting that this Committee should again have the right to present amendments to the budget. This right was revoked in 2007,” recalled the deputy. Eliana Graça, from INESC, spoke along the same lines, affirming that the creation of that Committee had been a victory for society. On another occasion, INESC had already supported committee amendments as the most adequate to the budgetary process, provided amendments were openly discussed at public hearings. This open discussion does not happen in the cases of individual and caucus amendments.

Deputy Paulo Rubem Santiago (PDT-Pernambuco) expressed his congratulations to the organizers of the breakfast, aimed at discussing the public budget with society. Deputy Paulo Rubem emphasized the extreme unfairness of our tax system, where poor people pay more – he was referring to our regressive tax burden. Society does not discuss economic policies. “The National Congress has no influence on the public debt, as the Constitution blocks amendments in this area,“ he protested.

Federal Deputy Chico Alencar (PSOL-Rio de Janeiro) also supported this criticism against budgetary items, such as the public debt payment, that cannot be changed. “Individual amendments pulverizes the budget, favoring clientelism,” said Alencar in opposition to the rapporteur’s opinion.

All the organizations cited above are part of the FBO.

October 14, 2009

by Lucídio Barbosa

Read analyses by FBO and INESC (in portuguese):

Technical Note 152 – Public security with citizenship in the 2010 PLOA.
Technical Note 153 – 2010 PLOA: the major figures.
Technical Note 154 – The agrarian reform budget and the miracle of the bread
FBO – Analysis of the Budget Legislative Proposal – 2010 PLOA.