Increasing resources do not balance public accounts, according to IBRE

The researcher in the field of Applied Economics of the Brazilian Institute of Economics (FGV/IBRE), Gabriel Leal de Barros, pointed out ways to balance the state budget.
Institutional
24 June 2014

From 2000 to 2013, the number of beneficiaries of the federal government increased by 46.5 million. Faced with this scenario, the researcher in the field of Applied Economics of the Brazilian Institute of Economics (FGV/IBRE), Gabriel Leal de Barros, pointed out ways to balance the state budget. These numbers add one more ingredient in the discussion around the new rule of the minimum wage adjustment, absolutely relevant to this balance, he said.According to the researcher, before the impact of income transfers on the public budget - which jumped from 6% to 9.6% of the GDP between 2000 and 2013 -, governmental programs such as ?Minha Casa, Minha Vida? and unemployment insurance should be reviewed. We need to improve management, adopt a more proactive attitude and minimize the concession of benefits for those who deep down do not have the right for it or for those who take advantage of the breaches in the policy design. It is also imperative to improve the integration of information in order to have more support in the evaluation of beneficiaries who are actually eligible to receive the benefit. Finally, we need to deliver intelligence and improve the control over the granted benefits, explained Gabriel Barros.For 2015, major reforms to public accounts are expected. At the macroeconomic level, the review of the minimum wage rule is one of them. Regarding microeconomics, unemployment, insurance, survivor's pensions and sick pay will be on the agenda. The most emblematic cases are the sick pay and unemployment insurance, where the number of beneficiaries grows quite in a volatile manner, suggesting important gap problems in policy design. Examples in which the worker is in the informal labor market, i.e., unregistered; only to receive unemployment insurance are known. A similar situation occurs in sick pay concessions, says the economist. In Barros' evaluation, increasing the allocation of resources is not the way to balance the state budget. The State's management capacity is what should be prioritized in this case. It is possible to reduce the pressure of these expenses with more control and management over the concession of benefits, he concluded.

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