Brazil emergency aid for low-paid workers jumps to nearly $50 billion

FILE PHOTO: People wait in line, next to social distance signs, outside a public bank, where most of them try to receive emergency aid given by the federal government to the most vulnerable, during the coronavirus disease (COVID-19) outbreak, in Rio de Janeiro, Brazil, May 29, 2020. REUTERS/Ricardo Moraes

BRASILIA (Reuters) - Brazil’s emergency payments to low-paid, informal workers hit hard by the COVID-19 crisis stands at around 254 billion reais ($48 billion), more than double all 2020 discretionary spending, a senior Economy Ministry official said on Thursday.

Special Secretary Waldery Rodrigues also said that new measures to protect jobs are being drawn up and will be announced soon, while a temporary reduction of the ‘IOF’ tax on credit card transactions may be extended too.

Rodrigues was speaking after the ministry drastically revised its fiscal outlook, which now incorporates significantly higher debt and deficits due to the COVID-19 pandemic’s impact on government spending and tax revenues.

Crisis-fighting expenditure is now expected to have a 521 billion reais impact on the primary budget balance, the ministry said, up from 418 billion reais previously.

These new forecasts factor in the extended emergency payments to low-paid, informal workers for a further two months, the cost of which will probably be around 100 billion reais, Rodrigues said.

President Jair Bolsonaro on Tuesday signed a decree to extend the emergency stipends, a popular and crucial program for millions of the country’s poorest and most vulnerable people, but which has added to concerns about the surging government deficit.

The Economy Ministry’s emergency measures are unlikely to include a further extension of tax deferrals, however.

“Delaying tax payments is not an amnesty. Therefore, they will have to be collected when the they are due,” the ministry said in a written response to journalists after being asked about the issue.

Reporting by Marcela Ayres and Jamie McGeever; Editing by Alistair Bell