A financeirização subsidiada: a consolidação do poder das finanças através dos recursos públicos

Abstract

This work relates the change in the budgetary governance regime to the restructuring of the tax burden in favor of credit, mainly through the exemption of income tax for certain asset classes. The evolution of these subsidies and their approximate costs are also presented in this chapter, which demonstrates that there is a duality present in the current Brazilian budgetary governance regime: on the one hand, the flexibility/permissiveness of tax expenditure, favoring social segments and economic sectors, to a large extent, already privileged in the distributive process, and on the other hand, the rigidity/sterilization of budgetary expenditure, to the detriment of social segments and economic sectors already penalized by the fiscal austerity policies in progress. This dual reality of the public budget – rigidity with budgetary expenditure x flexibility with tax spending – is most pronounced in two sectors addressed in this work: agribusiness and infrastructure. It is possible to observe that tax expenditures on agribusiness grew by 300% in the period 2010-2019, while those on infrastructure grew by something like 175%. On the other hand, primary expenditures in these areas moved in the opposite direction, with a reduction of approximately 40% in spending real with infrastructure and stability in spending on the agricultural sector during the same period. The rise in tax expenditures is, therefore, yet another hallmark of the current Brazilian budgetary governance regime. The existing loophole in the spending cap rule (Constitutional Amendment 95/2016) for this type of expenditure is one of the elements that encourages its growth. The increase in revenues, even when managed by a specific budgetary body or linked to a particular expenditure, does not mean an increase in the possibility of executing the expenditure by the public sector. Therefore, what we see is a total transfer of the decision-making process to the private sector, without a total transfer of the risks and costs involved in the execution of the projects. The financial sector then comes to play a central role in conducting investments. The deliberate weakening of the instruments and organizations linked to government planning, with repercussions on their links with the budget, helps to create this situation. If, when the decision to finance was public, national needs could be taken into account and projects in remote areas could be carried out, the trend since the transition of the decision-making process to the private sector is that projects are increasingly concentrated in already developed areas with high traffic, widening existing inequalities in the country. In this sense, financialization should be understood here from two perspectives: an increase in the cost of executing projects; a total transfer of the decision-making process to the private sector without an equivalent transfer of public costs and responsibilities.