Budget Commission approves project that opens a loophole for blocking resources for science and technology fund | Policy

The Joint Budget Commission (CMO) approved this Wednesday (6th) a bill by the National Congress, authored by the Executive, which, according to technicians, opens loopholes for blocking resources from the National Fund for Scientific and Technological Development (FNDCT) in this year.

The FNDCT is administered by a council linked to the Ministry of Science, Technology and Innovations. The objective of the fund is to finance innovation and scientific and technological development to promote the country’s economic and social development.

Last year, a law came into effect that prohibits the blocking of FNDCT resources. However, the project approved by the commission on Wednesday (6th) says that these provisions approved last year and included in a 2007 law “do not prevent the implementation of budget changes that imply a reduction in the allocations consigned to the National Development Fund Scientific and Technological – FNDCT”.

The mechanism, called in economic jargon “contingency”, is a procedure carried out by the Executive to contain expenses. The action consists of the government blocking the execution of part of the budget due to the forecast of not having enough revenue.

In the opinion of congressional technicians, the proposal is “overlapping” the current legislation — which could not happen via the Budget Guidelines Law (LDO).

The text, which changes this year’s LDO, still needs to go through a joint vote of parliamentarians in a session of Congress, which should take place next Friday (8).

According to the technicians, if approved in a session of Congress, the Executive will have a device that will allow the restriction of the value of the FNDCT. With this, the government can then send a new bill to Congress to reallocate amounts from the fund’s budget. The technicians still do not have an assessment of how much will be blocked.

A joint technical note from the Budgets, Inspection and Control of the Senate and Budget and Financial Inspection of the Chamber says that the law that prohibits the blockade of the FNDCT “does not allow the adoption of any procedure that aims to prevent the full execution of the expenses authorized in the scope of the FNDCT.”

Also according to the note, the LDO “does not have the power to change this ‘compulsory execution’, since it is determined in the specific law of that fund”.

Deputy Angela Amim (PP-SC) tried, by means of a suppressive amendment, to withdraw the provision, but was defeated. According to her, the device can configure a loss of BRL 2.5 billion for the science and technology area and “to nullify all benefits brought by the passage” of the law that prevents contingency.

At the CMO session this Wednesday (6), opposition deputies criticized the text and warned of the risk of lack of funds in the fund.

“I can’t help but put it here at the moment when it comes to reducing investment in science and technology… Even if the deputy [Carlos Henrique] gaguin [relator da matéria] he said — and if he said it, it is true, there is no doubt — that this money will be spent because it was not possible to spend it, it was not possible to spend it due to the incompetence of a government, because our universities are closing. Federal universities don’t even have money for toilet paper, they can’t pay guards, cleaning staff”, said deputy Enio Verri (PT-PR).

“We are condemning Brazil to lose space in the international field, a space that had been conquered a long time ago,” said the parliamentarian.

The same joint note from the House and Senate consultancies assesses another provision of the project as “reckless”.

The text makes it possible, in 2022, to settle “remains payable” not processed last year for creditors other than those initially indicated. Remains payable are expenses committed and not paid by the end of the financial year.

According to the technical document, this change would be “a disguised extension of the term of validity of the budgets to, then, bind the commitment note – a document that undoubtedly cannot be removed as a precondition for the realization of public expenditure – to a creditor that is not the original, but an illegitimate replacement.”

“As noted, the proposed text does not provide for a deadline for making adjustments that affect the 2021 financial year, and the current LDO does not allow any changes after January 30th”, says the note.

According to the document, the measure is not supported by the Constitution.

The proposal was criticized by Novo parliamentarians during the CMO vote.

“We understand that it even goes against the rules of public finances in Brazil. The possibility of changing the creditor in the pledge note is something that could not be admitted. This is something very foolhardy”, said deputy Marcel Van Hattem (NOVO- LOL).

“In the name of transparency in the use of public resources and expenditures that must be scrutinized by the entire population, in a very transparent way, we are against PLN 17 [projeto analisado],” said the MP.

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