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Victory for Rousseff: Senate passes major bill of fiscal austerity plan

Thursday, August 20th 2015 - 07:02 UTC
Full article 9 comments
The vote puts an end to months of heated debate over the final major piece of legislation in Rousseff's fiscal austerity plan The vote puts an end to months of heated debate over the final major piece of legislation in Rousseff's fiscal austerity plan
A rebellious Lower House approved bills to raise spending introduced by Speaker Eduardo Cunha, who broke with her coalition A rebellious Lower House approved bills to raise spending introduced by Speaker Eduardo Cunha, who broke with her coalition

Brazil's Senate approved a bill to roll back payroll tax breaks on Wednesday that is a key measure in President Dilma Rousseff's efforts to reduce a gaping fiscal deficit and restore confidence in her government's accounts. The Senate voted 45-27 to pass the bill which was received from the lower house with no changes.

 The vote puts an end to months of heated debate over the final major piece of legislation in Rousseff's fiscal austerity plan aimed at saving Brazil's threatened investment grade credit rating.

Though a victory for Rousseff, the bill was watered down in the lower house, where lawmakers voted to maintain tax breaks for several businesses, such as call centers, transport companies and the poultry industry, among others.

These changes to the government's original bill reduced the generation of new fiscal revenues to 10 billion Reais ($2.8 billion) a year from the planned 13 billion Reais.

Rousseff has struggled to pass austerity measures through a rebellious Congress, with the lower house approving bills that raise spending introduced by Speaker Eduardo Cunha, who broke with her coalition and defected to the opposition last month.

Rousseff, who was narrowly re-elected last year, made a policy U-turn in February and announced she was going to double the social security tax rate on corporate gross revenue, reducing payroll tax breaks for 56 business sectors.

The roll-back is part of her effort to undo fiscal measures that were aimed at stimulating the economy during her first term but which eroded the government's accounts and raised fears about the country's financial health.

Other government measures that reduced pension and unemployment benefits have cleared Congress, but they were also diluted by lawmakers, reducing their effect on fiscal savings.

Categories: Economy, Politics, Brazil.

Top Comments

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  • ilsen

    She's changed her tune!
    Austerity Measures? Oh my!
    ( clutches pearls )
    Lol!

    Aug 20th, 2015 - 10:30 am 0
  • ChrisR

    But, and there's always a but, how much corruption money did it take to get them all to 'change' their intended vote from Nay to Yeah?

    Aug 20th, 2015 - 11:17 am 0
  • yankeeboy

    Too little too late
    This will compound the recession
    Until they get rid of the free $ to slum dwellers theyll never fix what ailes them

    Aug 20th, 2015 - 11:24 am 0
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