Page 11 - MONTT LATIN AMERICAN MAGAZINE, DECEMBER, 2021

Brazil: Controversial Budget 2022 Approved
An impressive increase in electoral spending characterizes this year the Brazilian fiscal spending with an increase that multiplies by three the amount that the political forces received three years ago.
Deforestation jumps in world’s largest Savanna
The Brazilian Congress approved the Budget Law for 2022, which includes a plan to help the most vulnerable and a controversial increase in funds for political campaigns.
The budget establishes that the country’s public expenditures will increase this year by around USD $845,614 million, of which 39 percent will be used to refinance the foreign debt.
This global sum also includes the Auxilio Brazil program for the sum of USD $ 15,614 million, which according to analysts is the strategy of the head of government for his re-election in the presidential, legislative and regional elections on October 2nd.
The 2022 budget delivers USD $ 859.6 million to the fund available to the parties to finance their campaigns, a sum widely criticized because it multiplies by three what the political forces received in 2018, which at that time reached USD $ 298.2 million. In addition, Congress incorporated, at the request of the President of the Republic himself at the end of the negotiations, about USD $ 300 million to increase the salaries of the Federal Police, another provision very disapproved of by the rest of the public employees, whose salaries have not suffered. no hike for years.
The new budget is based on an economic growth of 2,1 percent in 2022, a percentage lower than the 2,5 percent originally established by the Government, but much higher than some economists estimated it to be 0 , 5 percent. It also maintains that the country will end this year with inflation of 4,7 percent, almost more than one point than what the Bolsonaro Administration initially estimated.
Due to the unusual increase in expenses for election concepts, the fiscal deficit grew from USD $ 8,701.7 million to USD $ 13,912.3 million.
Tax Exemptions
On the other hand, the President of Brazil, Jair Bolsonaro, approved a bill that extends tax exemptions on payroll for 17 sectors of the economy, in an attempt to boost job creation, according to a decision published in the Official Gazette. This exemption was extended for another two years, until the end of 2023, and benefits personnel related to the meat industry, civil construction and the textile industry,
among other sectors. “According to this measure, companies can choose not to pay the Social Security contribution calculated on the payroll and continue to contribute based on their gross income. Thus, the productive entities have a greater incentive to hire personnel, ”said a press release from the Presidency.
Likewise, Jair Bolsonaro joined the right-wing Liberal Party (PL) with his sights set on his re-election in 2022, although he did not announce his candidacy for now. “We are not throwing anyone in charge,” but “this is a step to be able to think about something later,” said the Brazilian leader.
Also, in an electoral key, Bolsonaro affirmed that in the PL is “the future” of Brazil. “That future belongs to God,” he sentenced. “We have already removed the left and we do not want them to return,” the President also declared, referring to the favouritism that all polls attribute to former president Luiz Ignacio Lula da Silva. Bolsonaro, 66, was without a party since he broke with the Social Liberal Party (PSL) two years ago, with which he won the 2018 presidential elections. This is the ninth formation that Bolsonaro has joined since he began his career ago more than three decades, a common phenomenon in the fragmented Brazilian multiparty system.
Cabotage and Gold Law
On the other hand, the Brazilian Senate approved a bill to promote cabotage as part of the government’s efforts to reduce the country’s high dependence on trucking and also to support the port sector. Analysts maintain that any initiative that encourages the use of cabotage is vital for Brazil’s ports and for the logistics matrix in a country that has 8,000 kilometres of coastline. The legislative proposal for the project, known as BR do Mar (maritime highway), allows companies to charter vessels for coastal transport and use foreign-owned vessels that are built outside of Brazil.
Likewise, the Government of Jair Bolsonaro authorized at least seven gold prospecting projects in some of the most protected areas of the Amazon, home to at least 23 indigenous peoples. It is a practically virgin forest area near the border with Colombia and Venezuela.
Montt Latin American Magazine p11