Brazil’s finance minister says budget’s spending freeze ‘not enough’

By on 27/05/2015
Brazil’s finance minister Joaquim Levy urged lawmakers to back tax increases and cuts to social benefits

Brazil’s finance minister Joaquim Levy urged lawmakers to back tax increases and cuts to social benefits, saying last week’s spending freeze alone isn’t enough to shore up fiscal accounts, Bloomberg reports today.

“There are people who think everything is solved – it isn’t,” he told reporters in Brasilia early on Monday. “Our attention now has to be on this legislative agenda,” he said later in the day.

The government faces a crucial week in Congress as lawmakers are scheduled to vote on government legislation to boost corporate-payroll taxes as well as limits to retirement and unemployment benefits. The measures are designed to reduce federal spending and boost revenue to avert a sovereign-credit downgrade.

Budget minister Nelson Barbosa on 22 May said the government will freeze 69.9bn reais ($22.5bn) of spending from this year’s budget.

A government official said before the announcement that the finance ministry had wanted at least 75bn reais in cuts. Levy, who skipped the announcement of the budget freeze, said he had a cold.

While Levy told reporters early Monday the size of the cuts were “appropriate,” he said the government still has “work to do” to meet its goals.

About Winnie Agbonlahor

Winnie is news editor of Global Government Forum. She previously reported for Civil Service World - the trade magazine for senior UK government officials. Originally from Germany, Winnie first came to the UK in 2006 to study a BA in Journalism & Russian at the University of Sheffield. She is bilingual in English and German, and, after spending an academic year abroad in Russia and reporting for the Moscow Times, Winnie also speaks Russian fluently.

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