By Jack Aldane on 09/27/2021 | Updated on 09/27/2021

Bill would give President Jair Bolsonaro the power to cut jobs and public sector bodies and restructure ministries without congressional approval

A bill that seeks to reduce the state by reducing public sector wages and benefits has passed the stage of the lower house committee of Brazil’s congress.

The constitutional amendment – part of the government’s broader reform plan – aims to impose austerity measures on civil servants’ payrolls, as well as tighten job performance standards and change conditions and the duration of new employee contracts. It would also give President Jair Bolsonaro the power to cut jobs and public sector bodies and restructure government departments without congressional approval.

Congressman Marcel Van Hattem from the center-right Brazilian party Novo said: “We are proud to support this reform which will modernize our public services”, adding “we just need to reform the state”, Reuters reported.

Civil servants’ unions have resisted the bill, fearing it could lead to sudden layoffs and cuts in benefits. While the bill will not affect the wages or working conditions of current public sector workers, new and future public servants will see an end to retroactive pay increases, more than 30 days of annual leave and all leave. additional service-related. Military personnel, legislators and magistrates would be exempt.

There are also concerns about what broader reforms may mean for long-tenured civil servants. Francisco Gaetani, former executive secretary of the Brazilian Ministry of Planning, Budget and Management, said the biggest challenge in public sector reform was what to do with the current workforce.

“Can you retrain the elderly for ICT jobs? In a very limited way, you can. But there are legal issues, because some careers are very rigid, so you can’t relocate them, ”he said. “If we make government more flexible, we can have a more flexible and permanent workforce. It’s a paradox, but it means internalizing the rotation.

Balancing the books of Brazil

The Brazilian government first introduced the Constitutional Reform Bill to Congress in September 2020 with the aim of reducing spending on public sector salaries and pensions. In 2019, public sector pay and benefits expenditure reached nearly 14% of the country’s GDP, the 15th highest expenditure out of 142 countries according to World Bank data.

Speaking at a panel at the World Bank earlier this month, Gaetani said, “We spend a lot on things that we consider important, but where are the results? Sometimes you spend on important things, but you spend badly.

For the bill to pass, three-fifths of the plenary will need to give their support, a prospect that would likely be due to the country’s inflated budget deficit. Although the current deficit is down 65% from the previous year, it remains uncomfortably large at 73.6 billion reais ($ 14.5 billion).

As the elections approach in 2022, the Brazilian government must work to put reforms in place to keep private investors confident in its ability to downsize the state. He promised investors a dismantling of monopolies, as well as the commercialization of the main public and postal services.

In August of last year, two of Brazil’s top economic officials resign, complaining about the lack of progress on the economic and administrative reform program.


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