What is the difference between cutting and contingency?

The announcement of the reduction in investments in education provoked doubts registered in the main searches carried out by Brazilians on the internet: After all, it was cut, lock or contingency? And what does it mean contingency ?

The two words were protagonists in posters and slogans recorded in the demonstrations on Wednesday, May 15th. Check out an explanation of what the block made in the budget of the Ministry of Education (MEC) represents.

By definition of the Ministry of Economy itself, contingency means delaying or not making a payment. The decision on the use of this amount will depend on the behavior of revenues, that is, on tax collection.

This means that the earmarked part of the budget cannot be used until further notice, and the payment for which these funds were intended may not occur if this year's collection falls overly.

Data from the economic team indicate that the trend for 2019 is for a drop in revenue. That is, if this is confirmed, the payment of these bills will not be made.

Cut or contingency?

On a cut, the affected money ceases to be part of the budget at the same time. already in one contingency, as explained by MEC in a video published on Twitter, “if the economy improves, the amounts may be unlocked”.

However, although technically contingency It is cut being different terms, in practice they end up meaning the same thing in a year like 2019. This happens because the collection is low, so that, at the end of the determined period, the order is not to use that money.

When the economy's performance is disappointing, revenues are lower than expected and values ​​need to be revised downwards.

It has been something recurrent in recent years, aggravating the need for contingencies to meet the primary deficit target – and the MEC did not come out unscathed.

• In 2015, in the midst of a rapid deterioration in forecasts for the economy, there was a contingency of almost BRL 9.5 billion in the MEC at the beginning of the year, and an additional BRL 1 billion in July.
• In February 2016, MEC suffered a contingency of BRL 2.216 billion. In March, new blocks took the total to R$ 4.27 billion.
• In April 2017, there was a contingency of BRL 4.3 billion in the MEC. Four months later, R$ 450 million were released to federal universities.
• In March 2019, it was the turn of the Bolsonaro government to announce its decree blocking BRL 5.8 billion in Education, just above the BRL 5.1 billion blocked in Defense.

It is worth remembering that the amounts do not affect items such as salaries and pensions, which are required by law. Therefore, they focus on current and investment expenses.

(Sources: Exame and O Globo)

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