At the end of the year, Congress approved the creation of the poverty targeting system in Brazil. Inspired by the inflation targeting regime, she predicted the country would aim to reduce poverty and extreme poverty. If the goals are not achieved, the government will present to Congress the reasons for the breach and the actions to be taken to adjust course. Bolsonaro objected.
The proposal, originally from the Social Responsibility Bill, by Senator Tasso Giressati (PSDB-CE), has been included in the Auxílio Brasil Project by Representative Marcelo Aro (PP-MG). It also stipulated that the government periodically publish a report on the development of these rates, the measures it takes, the risks, and what can be done within the scope of public spending and the tax system to improve it.
It can be a guide for reforms and a shield that the government can use against various pressures on the budget. It did not expect any penalty for managers or any increase in spending.
But Bolsonaro refused. He said the new system was “against the public interest” and claimed that it would increase total public spending simply because the government would have to reduce poverty (to a level it chooses!).
The veto is also impressive because the decline in poverty is largely the result of economic growth. Thus the government is not only indicating that it is not committed to reducing poverty (an explicit goal of the constitution) but also that it does not trust its stick with regard to the development of GDP. It also reinforces the image of Auxílio Brasil as a program for the month of October and not for the future.
As if that were not enough, the veto takes the Pazuello standard of quality: the new law was enacted that mentions 3 times the existence of the target system, which was vetoed and therefore does not exist.
Indeed, Bolsonaro is repeating the feat of his predecessor. With another system, poverty targets were already approved in Congress in 2015. From former Senator Eduardo Suplici (PT-SP), the project passed through Parliament for 16 years and was rejected by Dilma.
In various forms, poverty reduction goals have been implemented in this century by advanced democracies such as New Zealand, Canada, and the United Kingdom. In Brazil, there are targets for inflation, the selec rate, the level of spending (the cap), and the difference between what is collected and what is spent (the primary outcome). Why do families not face material deprivation? What other goal should the state set as a priority?
* Doctor of Economics
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