Brazil Maria Lucia Fattorelli: the mask of the "deficit" of Social Security













Brazil


Maria Lucia Fattorelli: the mask of the "deficit" of Social Security

IN  HIGHLIGHTS ,  NEWS  January 31, 2017 22:22



In order to face the necessary debate about Social Security honestly, the government must present the complete data of the Social Security budget of the last years

By  Maria Lucia Fattorelli * , on the website of the  Citizen Debt Audit
The current Social Security Secretary, Marcelo Caetano , announced that he would present a catastrophic  "deficit" of the Social Security system , with the intention of defending the Social Security counter-  treaty described in PEC 287/2016 , on January 26, 2017.  reached in 2016 the amount of R $ 149.7 billion.
The secretary pointed out that this "deficit" refers to the General Social Security System (RGPS) and encompasses both the urban sector, which would have reached a "deficit" of R $ 46.8 billion, such as the rural sector, in which the "deficit" would have reached R $ 103.4 billion. He even admitted that in the period from 2009 to 2015 the urban sector of the RGPS was a surplus, and soon he added that "the trend is a deficit" (!), Without paying attention to the fact that we had a record year of unemployment that has nothing to do with the trend of our potentially rich country.

In his presentation, the secretary made it clear that, more than once, in this deficit there is no incidence of DRU - Unrelated Union Revenue -, explaining that if this were computed, the deficit would be even greater. However, at no point did he mention that he no longer counts the DRU because he did not count the income that sustains Social Security, of which Social Security is an integral part.
Unmasking the "Deficit"
The so-called "welfare deficit" is a farce. The account made to show the "deficit" is a distorted account.
Social Security is one of the Social Security tripods, along with Health and Social Assistance, and was one of the main achievements of the Federal Constitution of 1988.
At the same time that the constituents created this important tripod, they also established the sources of income - social contributions - that are paid by all sectors, that is:
  • companies contribute on the profit (CSLL) and pay the employer's share on the payroll (INSS);
  • workers contribute their wages (INSS);
  • and the whole of society contributes through the built-in contribution to all that it acquires (COFINS).
Besides these, there are contributions on imports of goods and services, revenues from contests and forecasts, PIS, PASEP, among others.
Social Security has been highly surplus in recent years, in tens of billions of reais, according to official data segregated by ANFIP. The surplus of resources was of R $ 72.7 billion in 2005; R $ 53.9 billion in 2010; R $ 76.1 billion in 2011; R $ 82.8 billion in 2012; R $ 76.4 billion in 2013; R $ 55.7 billion in 2014, and R $ 11.7 billion in 2015.

The repeated surplus of the Social Security should be fomenting debates on the improvement of the Social Security, Assistance and Health of Brazilians and Brazilians. This does not happen due to the priority in the allocation of resources for the payment of the so-called public debt, which is absorbing about half of the federal budget annually, and which has never been audited, as mandated by the Constitution.

The fallacious deficit presented by the government is found when one compares only the collection of the INSS contribution paid by employees and employers (leaving aside all other contributions that make up the Social Security budget) with the totality of the expenses with the Social Security, there is a dismemberment that does not have amparo in the Constitution and does not even have a defensible logic, since the workers are the biggest contributors of COFINS.

This distorted account, which compares only the contribution to the INSS with Social Security expenditures, produces the farce of the "deficit" that does not exist.

Article 194 of the Constitution is clear in establishing Social Security as an integrated system composed of the areas of Health, Welfare and Social Assistance, while Article 195 deals with Social Security financing throughout society. The dismemberment of Social Security faces the Constitution, which at no time says that its funding would be borne solely by contributions to the INSS.

The government has been omitted repeatedly and does not present the Social Security budget as it should.
The mere existence of the DRU mechanism already proves that there are resources in Social Security. If there were no appeal, there would be nothing to disassociate, of course. It should be remembered that the DRU, created since 1994 under the name of the Emergency Social Fund, had its rate increased in 2016, and it unties up to 30% of Social Security funds to transfer them to the payment of part of the interest on the public debt.

It is necessary to remove the masks from the fallacious "deficit" of the Social Security, in order to face this necessary debate in an honest way. For this, the government must present the complete data of the social security budget of the last years, also informing the amounts diverted through the DRU; the amounts corresponding to the exemptions granted to both urban and rural sectors; the tax credits that are not executed, also paying attention to the errors of the monetary policy that played the country in this absurd crisis that compromised the collection of the INSS, due to the increase of the unemployment to more than 12 million people, besides the 64 million people in age of working, however, outside of the labor market in our country.
The distorted analysis of this fallacious "deficit" can not serve as justification for PEC 287, whose main objective is to favor the financial market, as will be discussed in another article.

We call on the Secretary Marcelo Caetano and others responsible to come to the public to present the complete Social Security, DRU, deregulation, credit, and collection potential through policies to combat unemployment, so that we can hold the debate on Social Security without masks.

* National Coordinator of the Citizen Debt Audit

Video presentation of Marcelo Caetano available at <  https://www.facebook.com/PrevidenciaOficial/videos/1832252203709401/  >

Article 194 of the Federal Constitution: 
Art. 194. Social security comprises an integrated set of initiatives of the Public Authorities and of society, aimed at ensuring the rights related to health, welfare and social assistance. 
Single paragraph. It is the responsibility of the Public Power, according to the law, to organize social security, based on the following objectives:

I - universality of coverage and care; 
II - uniformity and equivalence of benefits and services to urban and rural populations; 
III - selectivity and distributivity in the provision of benefits and services; 
IV - irreducibility of the value of benefits; 
V - equity in the form of cost sharing; 
VI - diversity of the funding base; 
VII - democratic and decentralized character of the administration, by means of quadripartite management, with the participation of workers, employers, retirees and Government in the collegiate bodies. 
Art. 195 of the Federal Constitution:
Art. 195. The social security is financed by all of society, directly and indirectly, under the law, with funds from the budget of the Union, the states, the Federal District and the municipalities, and the following social contributions: 
I - of the employer, the company and the entity assimilated to it in accordance with the law, concerning: 
a) the payroll and other earned income paid or credited, in any capacity, to the natural person who serves him, even without a link employment; 
b) revenue or billing; 
c) profit; 
II - the employee and other social security insured persons, with no contribution on retirement and pension granted by the general social security scheme referred to in art. 201;
III - on the prognostic contest income. 
IV - of the importer of goods or services from abroad, or of whom the law equates it. 
Analysis of Social Security 2015 prepared by ANFIP, according to a publication available at  http://www.anfip.org.br/doc/publicacoes/20161013104353_Analise-da-Seguridade-Social-2015_13-10-2016_Anlise-Seguridade-2015.pdf

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Government accounts fear have in March 2017 the highest diamond for the month in 21 years





Federal government accounts posted a record high in March and the first quarter of this year, according to figures released by the National Treasury Office on Thursday (27).
In March alone, government spending exceeded tax revenues by R $ 11.06 billion - the worst result for the month since the beginning of the historical series in 1997. From January to March, the so-called primary deficit totaled R $ 18 , 29 billion, also the worst for the period in 21 years.


These accounts do not take into account the expenses of the federal government with the payment of the interest of the public debt.
The poor result of the public accounts happens in a still low activity environment, which has resulted in a fall in collection.
Although some signs of improvement in the pace of the economy appear, such as high confidence and industrial production, unemployment still remains high, which imposes a slower pace of recovery.

Revenue And Expenses

According to the National Treasury, total revenues fell by 3.2% in real terms (after the inflation reduction) in the first quarter, compared to the same period of 2016, to R $ 334.43 billion.
On the other hand, total expenses fell more strongly in this comparison: totaled R $ 293.76 billion in the first quarter of 2017, a decrease of 4.9% in real terms when compared to the same period of 2016.

Privacy Policy

The National Treasury Secretariat reported that the Social Security gap (public system that serves private sector workers) increased from R $ 28.98 billion in the first quarter of 2016 to R $ 40 billion in the first three months of this year, an increase of 38.1%.
For 2017, the government expects the INSS to register a new negative result, of R $ 188.8 billion.
The Congress discusses the Michel Temer government's proposal for pension reform. According to the government, the goal of the measure is to curb the growth of the INSS deficit.

The original proposal provided for a minimum retirement age of 65, for men and women, among other changes. Meanwhile, the House reform rapporteur, Rep. Arthur Maia (PPS-BA), presented a new text, with less rigid rules.
The government's objective is to try to maintain the sustainability of public accounts, in the face of a growing deficit of the Brazilian pension system.

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UNEMPLOYED POPULATION REACHES RECORD OF 14.2 MILLION

The unemployment rate in Brazil stood at 13.7% in the quarter ended in March, according to IBGE

RIO - The unemployment rate in Brazil was 13.7% in the quarter ended in March 2017, according to data from the National Survey by Sample of Continuous Households (PNAD) released on Friday 28, by the Brazilian Institute of Geography and Statistics (IBGE). With this, the unemployed population reached the record of 14.2 million people.


The result was equal to the median (13.70%), and therefore within the expectation of analysts heard by Broadcast Projections , which estimated an unemployment rate between 13.20% and 14.10%.


In the same period of 2016, the unemployment rate measured by PNAD was 10.9%. In the quarter ended February 2017, the result was 13.2%.
The average real income of the worker was R $ 2,110.00 in the quarter through March. The result was stable in relation to the same period of the previous year.
The usual mass of income paid to the employed totaled R $ 182.9 billion in the quarter up to March, also stable compared to the same period of the previous year.

Since January 2014, IBGE began to disclose the unemployment rate on a quarterly basis for the entire national territory. The survey replaced the Monthly Employment Survey (PME), which covered only the six major metropolitan areas, as well as the annual National Household Sample Survey (Pnad), which produced information referring only to the month of September of each year.
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