The Decree on Meal Vouchers and Meal Voucher Changes signed this week by President Luiz Inácio Lula da Silva is a good example of how it is possible to make the right diagnosis and have good intentions, but still adopt measures that are bound to fail.
Founded in 1976, the Workers’ Food Program (PAT) currently serves more than 300,000 businesses. These are employers willing to support their employees with hot “tickets” in exchange for tax benefits. We have a total of 22 million employees and a network of 800,000 certified restaurants and supermarkets. Although the scope was wide, there were some points that needed to be corrected. The main problem is the high fees charged to commercial establishments. The average amount paid by a restaurant or supermarket to receive a meal or food voucher (5.19%) is higher than the amount required to pay a credit card (3.6%) or debit card (2%) (2%). Faced with this problem, Lula chooses to create a table, a solution that is known to be wrong. The upper limit of interest rates was set at 3.6%. The government’s stated intention is to reduce food prices. The plan will certainly not achieve its purpose.
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There are two reasons. First, ceilings create distortions in price formation. Voucher operators would no longer be able to charge higher prices to establishments that generate little revenue, and would be forced to increase the rates they charge establishments that pay below-average rates. Large supermarkets, with thousands of customers who can get better deals, are more like restaurants that serve dozens of items a day, and customers end up paying more. The second reason is that, as studies of similar situations have shown, even establishments with lower rates are unlikely to pass on the difference to consumers.
Other changes provided for in the statute are valuable and more likely to be successful. The deadline for remittance of amounts to restaurants and similar businesses was now limited to 15 calendar days after the transaction, rather than approximately one month. However, its feasibility is questionable. About 30% of the voucher companies’ customers are in the public sector, where payments tend to take longer at city halls and state-owned enterprises. To avoid any surprises, the government took great care and set a one-year period for adjusting the contract.
The legislation also prohibits voucher companies with more than 500,000 employees from being responsible for the entire certification chain and requires cards to be used at every machine, certainly a competitive step forward. These measures should bring interest rates down significantly as new companies enter the market and competition increases. In any case, all this could have been requested by organizations dealing with competition. There was no need for the executive branch to be involved, especially in the case of erroneous measures.
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