A central theme in the negotiations for Brazil’s admission to the Organization for Economic Cooperation and Development (OECD), environmental protection received last year, under President Jair Bolsonaro, the lowest amount of funds in 12 years, according to data from the National Treasury Secretariat: R$3.87 billion. In 2010, under Luiz Inácio Lula da Silva, the federal government disbursed R$15.34 billion on this front, the highest in the series.
Spending on environmental protection in 2021 was equivalent to 0.04% of the GDP, while spending on military defense, for example, reached 0.56% of GDP. With civil defense, the expense was 0.01% of the GDP.
The data are in the Central Government Expenditure by Function (COFOG), which organizes federal government spending according to the methodology developed by the OECD with the United Nations. This data allows for comparisons with other countries.
According to COFOG’s data, total central government expenses reached R$2.7 trillion last year. It was down in comparison with the previous year, when the pandemic impacted public accounts. As a proportion of the GDP, total spending fell to 31.43% from 36.61%.
In the comparison between 2021 and 2020, the only government function that registered an increase was public services, which reached 12.03% of GDP, compared to 11.64% of GDP in the previous year. According to the National Treasury, the main reason is interest on public debt, which reached 6.93% of the GDP.
Another justification is transfers between different levels of government, which reached 4.18% of GDP. The figure reflects a larger volume of money distributed by the federal government to states and municipalities, according to the rules set out in the Constitution. Revenues from income tax and the Industrialized Products Tax (IPI) are shared.
Of the 10 functions that make up total spending, the largest is social protection, which consumed the equivalent of 39.9% of GDP last year, compared to 47.6% of GDP in 2020. The National Treasury reports that this is due to the maintenance of part of the measures to tackle the Covid-19 last year.
Health spending reached 2.43% of GDP last year, compared to 2.67% in the year before. In this group, the biggest item was hospital services, with 1.18% of GDP in 2021.
On the Education front, spending reached 2.15% of GDP in 2021, compared to 2.16% of GDP in 2020. The largest share, 0.81%, was spent on higher education, while education at the junior high school and high school levels received 0.35% of GDP. Spending on basic and elementary education was 0.75% of GDP.
The COFOG analysis combines the economic and functional classifications of expenditure, so that it is possible to evaluate which inputs were used to perform the functions. In this cut, the most relevant expense is employee payments, which accounted for 11.4% of total central government spending last year.