Lula announces legislative decree to speed up the transfer of funds to Rio Grande do Sul | Policy

After more than a week of storms, Rio Grande do Sul is having to deal with overflowing rivers, flooding of cities and destruction of parts of highways. As of Monday, more than 80 people have died due to the rains.

The text of the decree sent by Lula, which will have to be approved by the Chamber and Senate, recognizes “the occurrence of a state of public calamity in part of the national territory, to deal with the consequences arising from climatic events in the State of Rio Grande do Sul”.

Under the proposal, the Union is authorized to make expenses and tax waivers in favor of Rio Grande do Sul without having to comply with rules on spending limits. In addition, it makes rules more flexible for contracting services and purchasing products by public authorities.

Lula signed the act during a meeting at the Planalto palace to discuss aid for Rio Grande do Sul. Also present were the president of the Senate, Rodrigo Pacheco (PSD-MG), the president of the Chamber, Arthur Lira (PP-AL), the vice-president of the Federal Supreme Court (STF), Edson Fachin, and government ministers.

“We are going to do everything in our power so that we can contribute to the recovery of the state of Rio Grande do Sul, with the improvement of people’s lives, and facilitate whatever we can facilitate, obviously within the law, the lives of the people of Rio Grande do Sul. So I will sign the message here, and this is the first of a large number of acts that we will do for the benefit of our brothers in Rio Grande do Sul”, stated Lula.

The Minister of Planning, Simone Tebet, explained that a proposed amendment to the Constitution, as had been previously considered, will not be necessary to send the resources to the state. A PEC changes the Constitution, therefore, it is more difficult to be approved.

“Any benefits, incentives or expenses that we may make with states and municipalities are outside the spending limit and fiscal targets. We will await demands from city halls, the state government, the capital, Porto Alegre, and sectoral ministries”, he stated Tebet.

According to the Minister of the Civil House, Rui Costa, it is not yet possible to afford the cost of rebuilding the state, as there are still flooded areas.

Rui Costa says Lula will announce legal path to help RS

Tebet also stated that there is no forecast yet. “We don’t even have an estimate of how much will be needed. Let’s put a magnifying glass on these values,” she said. “Only when the waters recede will we see the immense extent of the cost of this national tragedy,” she added.

Earlier, the Minister of Regional Integration, Waldez Goés, estimated that around R$1 billion will be needed just to restore Rio Grande do Sul’s highways.

The discussion at the moment in the government and in Congress is what the legislative design will be to enable, within the law, the government to transfer funds quickly to Rio Grande do Sul and without violating the rules of the fiscal framework, which provide for spending limits of the Union.

According to the government leader in Congress, senator Randolfe Rodrigues (AP), Planalto defends the following path to respect tax legislation and make financial aid possible:

• Approval by Congress of a legislative decree that recognizes the situation of public calamity in Rio Grande do Sul;
• Approval by Congress of a project to modify the expenses provided for in the Budgetary Guidelines Law and make spending limits more flexible;
• Once the previous actions were approved, the government would then issue a provisional measure that opens extraordinary credit and allows the sending of money to Rio Grande do Sul.

Extraordinary credit is an authorization for the government to use additional resources to meet unpredictable and urgent expenses, such as those arising from war, internal commotion or public calamity. This credit is created through a provisional measure and requires approval from the National Congress.

The understanding in Planalto is that the current legislation – Fiscal Responsibility Law (LRF) and fiscal framework – is expected to make fiscal rules more flexible in the case of a public calamity recognized by the National Congress.