By Marcela Ayres
BRASILIA, Feb 10 (Reuters) – Brazilian Finance Minister Fernando Haddad said on Tuesday that the country should consider a new framework for social-assistance spending, similar to the past overhaul that merged several programs into a single cash‑transfer scheme.
“What is being discussed is this: with this level of investment in social assistance, wouldn’t it make sense to do what President Lula did in 2003? There were many programs, and Bolsa Familia emerged as the overarching umbrella,” Haddad said.
Speaking at an event hosted by BTG Pactual, Haddad made the remarks when asked about possible measures to strengthen control over public finances.
He stressed, however, that no proposal along these lines has been submitted to President Luiz Inacio Lula da Silva.
Haddad had previously said he expected to leave the Finance Ministry by the end of this month while discussing with Lula whether he would help draft a re-election platform or run for office in the October general elections.
On Tuesday, however, the minister said he met Lula on Monday and was asked to handle additional tasks before leaving the ministry, including what he described as “important matters” with the Justice Ministry in the area of public security.
Many in Lula’s leftist Workers Party see the race for governor of Sao Paulo, Brazil’s richest and most populous state, as a key platform for the president’s bid for a fourth non-consecutive term, with Haddad seen as a potential candidate.
Haddad also said he sees no reason for Brazil’s real interest rate to continue rising, noting that inflation is easing while the benchmark nominal rate remains steady at 15%.
“With a real interest rate at this level, you cannot offset it with any amount of primary surplus,” he said.
Brazil’s central bank has already signaled it is likely to begin an easing cycle at its next monetary policy meeting in March.
(Reporting by Marcela Ayres, Editing by Louise Heavens and Mark Porter)
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