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Spending cap left Brazil without immunity in social area, says a study

05/07/2020, 10:11 AM | Estimated reading time: 11 min
A pioneering study released by Inesc shows how the federal government’s fiscal austerity measures and the passage of Constitutional Amendment 95 undermined the social policies needed to protect the most vulnerable population from the current pandemic.
Foto: Denniz Futalan/Pexels

A pioneering study released today by the Institute for Socioeconomic Studies (Inesc) shows how the federal government’s fiscal austerity measures and the passage of Constitutional Amendment 95 undermined the social policies needed to protect the most vulnerable population from the current pandemic.

Entitled O Brasil com baixa imunidade – Balanço do Orçamento Geral da União 2019, [freely, Brazil with low immunity – Review of the 2019 Federal General Budget]  the report shows that, from 2014 up to last year, the federal government’s ongoing fiscal effort resulted in a 28.9% cut in the country’s discretionary expenditure on social programs. Over 2018-2019 alone, social spending dropped by 8.6%.

The 2019 budget for the health care sector, which has historically suffered from underfunding of the national health public system (SUS), did not increase year-over-year, remaining at a level similar to that of 2014. On the other hand, the Brazilian population grew by seven million people over the same period, thus revealing a sharp reduction in per capita health expenditure.

“Brazil is visibly weaker to tackle the challenges posed by the pandemic”, states Inesc policy advisor Livi Gerbase.

In addition to the health care budget, Inesc’s publication assessed execution of the Federal government Budget in 2019 for seven other public policy areas: education, right to the city, socio-environmental, child and adolescent, racial equality, women, and indigenous peoples.

For the specialist in Tax Justice, even though the Covid-19 crisis primarily affects  the health care system, its effects spill over to every public policy. The reason for that is because quarantining the population paralyzed productive activity, which will trigger a deep recession, an increase in joblessness, and a worsening of social inequalities.

“In a country where the poor, blacks, women, and indigenous peoples are always the most penalized, the Covid-19 pandemic will make things even more difficult for this large swath of the population”, asserts Livi.

Inesc’s study concludes that cutting expenditure for the sake of meeting a fiscal target comes at a very high price, especially for the most vulnerable groups who disproportionately foot the bill. Conversely, the federal government commemorated a reduction of the primary deficit between 2018 and 2019, which went down from 1.8% of GDP to 1%, or R$ 95.1 billion. This result was largely achieved on account of the suspension by the federal government of authorized executions last year, a measure only revoked close to the end of the year, thus preventing expenditure execution.

“Over and beyond a analysis of these figures, we sought to find out if the public policies and their respective budgets were at the service of the people, particularly those most in need, and not just to protect the public debt, often enriching economic sectors already quite privileged”, stresses the Inesc advisor.

Still according to Livi Gerbase, this is the first report of a series of annual reports to be published by Inesc for the purpose of tracking federal expenditure on promotion of human rights. The Budget and Rights Methodology, Metodologia Orçamento & Direitos, used in the document, submits federal budget analysis to a “human rights test” hinged on five requirements or pillars: funding with tax justice, maximum mobilization of available resources, progressive realization of rights, nondiscrimination, and social participation.

Among the measures  proposed by Inesc to tackle the upcoming recession are:

– revoking Constitutional Amendment 95;

– implementing policies safeguarding jobs and wages, including casual labor;

– rebuilding the national health system (SUS) budget;

– strengthening environmental oversight bodies for sustainable growth;

– reforming the tax system, including taxation of profit and dividends, and fairer tax rates to stop the super-rich, i.e., those earning 320 minimum wages-plus, from continuing to pay less than a 2% effective income tax rate;

– approving, on an urgent basis, the Fund for the Maintenance and Development of Basic Education and Valorization of Education Professionals (Fundeb) and;

– providing transparency to anti-Covid-19 activities, with detailed accounting of area’s budget execution.

Below are some examples of social programs that had their budgets cut.

Education

In Education, public investments fell, in real terms, from R$ 109 billion in 2018 to R$ 106 billion in 2019, a drop that could have been avoided had the total budget appropriated, amounting to R$ 123 billion, been fully executed.

The Coordination for the Improvement of Higher Education Personnel (Capes) and the National Council for Scientific and Technological Development (CNPq) lost half of their government research grant funding in the last five years. From 2015 onwards, Capes’s budget, for example, was R$ 4.5 billion, down from R$ 9 billion.

Racial and Gender Equality

This area was one of the most negatively affected by the federal government in 2019. The racial equality budget varied negatively by 45.77% in comparison with the previous year. When considering the period from 2014 to 2019, funds for racial equality policies decreased, in real terms, by 81%. The same happened with women’s policies, whose budget fell by 75%.

Environment

Starting in 2017, budget execution of the Ministry of Environment (MMA) falls steeply only to reach 2019 with the ministry’s lowest budget execution since budget analyses began in 2012. R$ 2.68 billion were executed – an 8.6% decrease over 2018 and 20% in relation to 2012.

Right to the City

To budgetary item “Urbanism” was added a significant part of the actions and programs carried out by the abolished Ministry of Cities, such as urban services and collective urban transportation. In 2019 funds appropriated were 50% lower than in 2012.

Indigenous Health

In 2019, budget execution  regarding indigenous health was R$ 1.48 billion against R$ 1.76 billion in 2018, roughly R$ 280 million less, thus compromising health care services to this group, which exhibits the worst indicators in comparison with the rest of the population as regards the cases of suicide, malnutrition, child mortality, and tuberculosis.

National Education Program (PNE)

For 2019 and 2020, PNE forecast appropriations amounting to 7% and 10% of GDP, respectively. With the budget cut, this percentage should not exceed the 5% reached in 2018. Last year, the Ministry of Education simply excluded the Student Cost-Quality criterion (or CAQ, which established funding as a function of the quality of basic education), from the ministry’s expenditure.

Youth and Adult Education Program (EJA)

The responsibility of the federal government, the Youth and Adult Education Program (EJA) had its resources reduced from R$ 76 million to R$ 2.4 million last year. According to the 2019 School Census, EJA enrolment decreased by 7.7% over the period, but, since there are no surveys to identify the reasons for this drop, the hypothesis that emerges is a shortage of program places for applicants. With that, the country risks failing to accomplish the goals of reducing functional illiteracy and increasing adult schooling.

Protection to Children and Adolescents

Expenditure on child and adolescent basic health care policies, considering the financial execution of both Budget Plans, plunged from R$ 17.5 million in 2018 to R$ 6.81 million last year.

The Ten-Year Plan approved by the National Council for the Rights of the Child and the Adolescent (CONANDA) comprised, at the time it was launched, in 2012, 13 actions. But only four were implemented in 2019. And just 27.4% of the R$ 159.45 million authorized for 2019 was executed.

In 2019, budget appropriation for a specific program designed to fight against children and teenage sexual violence nearly disappeared. Tackling this crime was merged into a more general program that includes several forms of violence against children and teenagers, thus reducing the transparency of specific actions. Even so, in 2019 no funds were executed regarding this program.

Child Labor

More than 1.8 million children and adolescents aged 5 to 17 years were engaged in child labor in 2016 (continuous national household survey PNAD). Despite  the goal of putting an end to this malaise by 2025, expenditure for the eradication of child labor in 2018 and 2019 had no budgeted federal funds.

About INESC – The Institute for Socioeconomic Studies (Inesc) is a nongovernmental, nonprofit, nonpartisan organization based in Brasília. Since its creation in 1979, Inesc has advocated for democracy and human rights, in addition to fighting against all forms of discrimination and inequality. Inesc was one of the five civil society organizations that launched the campaign A Renda Básica que Queremos [freely, the basic income we want], an initiative that culminated in emergency aid amounting to R$ 600 per individual to be distributed to millions of vulnerable Brazilians affected by the pandemic.

Category: Notícia
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