With Brazil’s first-round election just days away, President Luiz Inácio Lula da Silva will announce another package of measures this Friday (Sept. 25) aimed at improving perceptions of his government. The initiatives are expected to include steps to reduce household debt and a ban on online betting.
The announcement is scheduled for 5 p.m. in São Paulo, with Finance Minister Dario Durigan and other officials expected to attend.
The decision to unveil the package was made Wednesday (Sept. 23) during a meeting at the Alvorada Palace, the presidential residence. President Lula asked his economic team to accelerate work on the final design.
Government economic and legal teams have been working “24/7” since Wednesday to complete the details, a person familiar with the discussions said.
The package is expected to be the government’s last major announcement before the Oct. 4 first round of the election.
Betting ban
During an event in Maceió on Thursday night, Lula offered a preview of what he intends to announce.
“Tomorrow [Friday] I will have important announcements. I’m going to put an end to ‘bets’ in this country before they put an end to Brazil,” he said.
The president also said he had met with indebted families in conversations featured in his campaign broadcasts this week.
“I discovered that betting is a disease,” Lula said.
He also promised “measures” involving credit cards, which he called a “disgrace.”
“I am concerned about people’s debt. If someone takes on debt and increases their assets, that is important. What cannot happen is selling through addiction,” he said.
Until a few days ago, the government was still considering whether it could announce measures to reduce household debt before the election. Officials were concerned that doing so could run afoul of electoral law.
To address those concerns, the measures are expected to be presented as a new version of Desenrola, the government’s debt-renegotiation program.
Lula asked for the restrictions on online betting and the debt-relief program to be announced together, a person familiar with the discussions said. The move would also address people who accumulated debt through gambling.
Debt relief
One version of the program under discussion through last week involved an “auction” model under which the National Treasury would buy old consumer debts dating back four or five years, including obligations incurred during the COVID-19 pandemic.
Under the proposal, the Treasury would settle the debts at a discount of around 95%, reflecting their low likelihood of recovery.
As of Thursday, government officials were still assessing whether that structure could be announced without violating electoral law or whether changes would be needed.
The initial design would not have required families to repay the Treasury, though that provision could also change.
In an interview with newspaper Extra last week, Durigan said the government was studying a new program to reduce household debt, without providing many details.
“We are going to propose to the president a policy to clear people’s names, particularly regarding older debts that banks and service companies themselves have already given up hope of collecting,” Durigan said.
The economic team believes the Desenrola Inadimplentes program launched this year was important but insufficient to significantly reduce the share of household income committed to debt payments. Officials therefore see a new round as necessary.
High household debt burdens have also been cited by government officials as one factor behind Lula’s negative ratings in election polls and as an issue in the presidential race.
Total ban
The government is also expected to announce restrictions on online betting Friday.
The issue had divided the administration. Economic officials favored banning only online casino games while restricting advertising, while political advisers advocated a complete prohibition that would also cover sports betting.
Lula ultimately opted for a total ban on online betting. The government is preparing a provisional presidential decree to provide the legal basis for the proposal.
Betting companies that joined the regulatory framework introduced under Lula’s government — including by paying licensing fees and investing in Brazil — say they may challenge the measure in court.
Critics of a ban also argue that it could push consumers toward illegal betting platforms.
The government is separately considering a lower-interest credit line for soccer clubs, which could lose sponsorship revenue as a result of restrictions on betting companies.
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