Brazil´s ´My House, My Life´ Viewed as a 2012 Budgetary Priority
With rising pressures in dealing with Brazil’s massive affordable housing deficit as a result of the impending 2012 municipality elections, the government has affirmed its commitment to continue with the R$ 22.9 billion Minha Casa, Minha Vida (My House, My House) programme after the slow pace of its development in 2011.
As confirmed by President Dilma in her recent national radio broadcast, the affordable housing programme forms a fundamental part of Brazil´s imminent economic growth. According to research by NGO Contas Abertas, the value will include the R$ 11 billion already earmarked under budgetary law (Lei Orçamentária Annual) via the National Congress and the remainder R$ 11.9 billion from non-applied funding from previous years. Castello Branco, coordinator at Contas Abertas also estimated that the funding allocation could well be increased by the end of 2011, as the government is often accustomed to doing.
Out of the total R$ 9 billion of involved expenses (financial resources earmarked for future deployments), just R$ 11.7 million has been deployed this year. For 2012, the government has prioritised the repayment of accumulated accounts, totaling R$ 5.9 billion – with the majority (R$ 5.2 billion) being transferred to the Residential Fund Leasing (Fundo de Arrendamento Residencial, FAR), effectively a housing donation initiative managed by the Ministry of Cities (Ministério das Cidades) with financial control under the powers of the Caixa Econômica Federal state owned bank.
The slow advancement of the programme´s application in 2011 has been regularly questioned and owed to a number of factors such as construction delays, staff issues, poor business models, rising costs, land speculation amongst others. In addition, the government has placed strict control mechanisms in place so as to not jeapordise public funds. Speaking with the Brasil Econômico newspaper, economist Mansueto de Almeida, commented that in 2011 the government has had extra checks in place to safely be able to meet public debt obligations. “As the spending to subsidise the programme is discretionary, it is the government that orders the Caixa Econômica Federal on how to allocate funding – avoiding any negative impacts that can be transferred to the next year,” he stated.
In line with the need to fortify Brazil´s internal economy moving in 2012 to sufficiently protect the country against the ongoing effects of the global crisis, de Almeida believes that government needs to increase budgetary spending in order to meet previous years obligations whilst also executing financing – via the Caixa Econômica Federal – for real estate construction (particularly for low income groups) to be able to progress at a good level.
