Pandemic raised federal gov’t’s expenditures by 16% in 2020

Boosted by the COVID-19 pandemic, the total costs incurred by the federal government om 2020 amounted to $466.6 billion and rose 16 percent from 2019, as per data released today (Apr. 6) by the National Treasury. The indicator gauges the three branches of government as well as the Federal Prosecution Service, with labor, operations, financial costs and supplies, property devaluation, and revenue distribution among states, municipalities, and civil organizations.

Costs stemming from the emergency allowance and the employment protection program ($57.6 billion) showed the largest contribution in making financial costs grow 19 percent in 2020. Another major driver was the purchase of supplies and equipment for tackling the pandemic of the novel coronavirus that raised operational costs at the Ministry of Health by 17 percent, from $3.8 billion to $4.4 billion.

Other factors behind the growth include the $8.1 billion increase in expenditures with the social security of federal servants and a $6.3 billion increase in the benefits from Brazil’s National Social Security Institute (INSS), linked to the raise in the minimum wage. Pulled by the aid for local governments resulting from the pandemic, transfers to states and municipalities went up $5 billion.

Remote work

Operation costs at the federal government (Executive branch) would have slipped ten percent in 2020, were it not for the elevation of expenditures at the Health Ministry. Most of the reduction is due to remote work among civil servants during the pandemic. Remote work slashed spending on daily rates and flight tickets by 31 percent, on kitchen and eating facilities by 40 percent, on telephone costs by 18 percent, and water, sewage, electric energy, and gas by 19 percent.

The other branches also reported declines in spending due to remote work. In the Legislative branch, they were down eight percent last year. In the Judiciary, the shrinkage reached 11 percent. In the Federal Prosecution Service, costs went down seven percent.

Counting salaries and other remunerations alone, expenditures with labor across the three branches plus the Prosecution Service went up a mere three percent in 2020. This expansion is said to arise chiefly from the payment of court sentences and the increase in the additional payment for the Armed Forces, brought into effect as part of the reform of military careers.