Brazil introduces public sector reform bill

By on 09/09/2020 | Updated on 24/09/2020
The speaker of Brazil’s lower house said in January that the latest reform bill would be given priority status. (Photo by Lucíola Correia via flickr).

The Brazil government has presented a constitutional reform bill to congress that would make it easier to fire civil servants and cut their benefits, and would give the president powers to eliminate public sector jobs and bodies and reorganise departments without congressional approval.

Current public sector workers would not see their terms or salaries changed under the proposed bill, but the benefits of future employees, such as retroactive pay rises, more than 30 days’ holiday per year and extra leave for length of service, would be cut. Military personnel, lawmakers and magistrates would be exempt, the government said.  

The aim of the proposed reforms is to simplify and reduce the cost of the public sector. Brazil spent 13.7% of GDP on the salaries and pensions of public sector employees last year, the country’s deputy special secretary for deregulation, Gleisson Rubin, said in a virtual press conference. This is the 15th highest percentage of the 142 countries analysed by the World Bank.

The government is under pressure to reduce national debt, which has shot up in recent months due to emergency spending and lost tax revenue resulting from the COVID-19 pandemic.

Caio Mario Paes de Andrade, special secretary for deregulation at the economy ministry, said the reforms would mark a “profound transformation of the state” and improve the quality and efficiency of the public sector machine, Reuters reported.

The constitutional amendment is the first of three phases that will overhaul Brazil’s public sector. Estimates on the fiscal impact on the public purse will be included in the second and third phases when guidelines on salaries are presented, ministry officials said.

Delays and complaints

The reform bill was expected to be introduced in November last year but was pushed back. Speaking at an event on 30 January 2020, economy minister Paulo Guedes said the government expected to submit the bill “in a week or two” and that he was confident the “administrative reform” bill would be approved this year. At the same event, Rodrigo Maia, the speaker of Brazil’s lower house, said the bill would be given priority status. However, it was delayed for a second time due to the pandemic.  

In August, two top economic officials – the ‘debureaucratisation’ secretary and the privatisation secretary – quit, complaining of the lack of progress on the economic and administrative reform programme.

The latest bill forms part of a major economic agenda aimed at chopping back what many describe as the “bloated” state through privatisations and the cutting of red tape. Social security and pension reforms were approved by congress last year, while tax reform and a new “federative pact” framework governing the flow of funding between central and local government are currently being drawn up.   

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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