Source: O Globo, 05/09/2007

Brazil lives a mystery: every year, governments ask for more money from taxpayers. Years ago. And nothing works in the state. According to the government, it is a lack of money. At the Ministry of Health, clearly the diagnosis is wrong. The sector receives the largest share of the Union's budget, and is still the only one that has the guarantee of an annual increase in its expenses.
 

Economist Rogério Werneck, professor at PUC do Rio, has been monitoring public spending for decades.
 
 He thinks the country has reached an unsustainable point.
 
- This tax regime will explode - he predicts.
 

Only one of the data collected by Rogério Werneck is enough to confirm this idea.
 
 - For 13 years, spending by Brazilian governments, at the three levels, has increased by a percentage that is twice the increase in GDP.
 
 In real terms, primary government spending grew 5,7% per year, while the economy grew 2,9%. And what does the current government do about it? It makes an accounting illusion in Social Security and says that there is no deficit, suspends any effort to cut expenses, hires more employees and says that the State suffers from rickets, increases the tax burden annually and asks for the extension of the CPMF - says Rogério Werneck.
 
 

The economist thinks it is time to ask why the CPMF has to be extended.
 
 - There is no emergency, there is no crisis, there is no drop in revenue. On the contrary: revenue is increasing.
 
 There is no reason to maintain a contribution that was supposed to be provisional in 1994. The opposition has a great chance of concretely stopping the expansion of government spending and overturning the tax extension. If the CPMF is required as an inspection, then it must have a regulatory rate.
 
 

With regard to Health specifically, economist Raul Velloso, a specialist in public accounts, says that the sector currently swallows 7% of the government's non-financial revenue.
 
 - Not to mention spending on employees: I am only talking about the cost of funding the SUS (Unified Health System) and investments.
 
 I do the calculation like this, separating the staff, because the expenses with employees are so bloated that it is the best way to see what actually goes to Health.
 
 In addition, there is the Serra amendment, which gives Health what no other sector has: the guarantee of increase according to nominal GDP.
 
 This means that, on an annual basis, health expenditure can increase inflation plus GDP. He is the only one who has this - says Velloso.
 
 

In spite of all this, the country has to hear from time to time that there is chaos in health and that the only thing to do is the usual healing wonder: more money.
 
 It does not occur to ministers that the best thing to do is to work so that the management improves, so that the money is enough to provide a quality service to the population.
 
 Raul Velloso adds personnel and pension expenses to see more clearly what happens to taxpayers' money.
 
 - Combining the two, Pension and personal, it gives almost 70% of the expenditure.
 
 Regardless of this reality, the Lula government decided to hire in an uncontrolled manner, increase the commissioned positions to distribute to comrades and allies, abandon the idea of ​​putting a limit on personnel spending and pretend that there is no deficit in Social Security. A country that only has 10% of its population over 60 has a broken pension and a government that says this gap is an illusion.
 
 - It is foolish, it is absurd, it is untenable - predicts Rogério Werneck.
 
 He draws attention to a fact that few people realize.
 
 - Companies have invested heavily in computerization.
 
 The Revenue too.
 
 This improved the entire collection machine. The electronic invoice was adopted.
 
 Now was the time to take advantage of revenue growth and cut taxes, but all the government does is increase spending. It seems that the sky is the limit for Brazilian public spending - says Werneck.
 
 

Another fiscal opportunity open to the country is the sharp drop in interest rates over the past 24 months.
 
 - This opened up a space of at least 1,5 percentage points of GDP and, instead of becoming relief for taxpayers, it becomes primary spending.
 
 States are raising more, and what do they do? They increase indebtedness.
 
 It is more or less as if I earned R $ 70, suddenly started earning R $ 100 and, instead of settling for it, I decided to take a debt of R $ 200 to further increase my expenses.
 
 Rogério Werneck uses strong words to make his diagnosis: - There is no remnant of lucidity in the decisions of Brazilian governments.
 
 But the government has said that the accounts are balanced because of the primary surplus and the drop in the debt / GDP ratio.
 
 - It was indeed a step forward for PT to understand the concept of debt as a proportion of GDP and work to reduce it.
 
 

But the idea of ​​fiscal sustainability is more sophisticated than having a primary surplus.
 
 In fact: the figures show that the primary surplus was possible because there was an increase in the load.
 
 The taxpayer was the only one to make the adjustment. The government only increased spending. The government needs to be stopped in its wealth, in its mistake to think that everything is resolved by spending more, to increase the burden each year and, in the budget proposal, to indicate that the burden will increase again.
 
 The state is not rickety in Brazil, contrary to what the confused president of Ipea thinks. It is the taxpayers who are becoming stunted in the country, in the face of an increasingly heavy government, increasingly incapable in any of the public services.