Brazil’s public sector reform bill advances through congress

By on 27/09/2021 | Updated on 27/09/2021
The proposed bill would give president Jair Bolsonaro powers to eliminate public sector jobs and bodies and restructure government departments without the approval of congress. Photo by Jeso Carneiro via Flickr

A bill that aims to shrink the state by cutting public sector pay and benefits has passed the committee stage in Brazil’s lower chamber of congress.

The constitutional amendment – part of the government’s wider reform plan – seeks to impose austerity measures on public servants’ payrolls, as well as tighten job performance criteria and change the terms and length of new employee contracts. It would also give president Jair Bolsonaro powers to eliminate public sector jobs and bodies and restructure government departments without congressional approval.  

Congressman Marcel Van Hattem of Brazil’s centre-right Novo Party, said: “We are proud to back this reform that will modernize our public services,” adding “we just have to reform the state”, Reuters reported.

Civil servant labour unions have resisted the bill over concerns it could lead to sudden dismissals and cuts to employee benefits. Though the bill would not affect the salaries or terms of current public sector workers, new and future public servants will see an end to retroactive pay rises, more than 30 days annual holiday, and any additional service-based leave. Military personnel, lawmakers and magistrates would be exempt. 

There are also concerns over what wider reforms may mean for long-serving civil servants. Francisco Gaetani, former executive secretary of Brazil’s Ministry of Planning, Budget and Management, said the biggest challenge of public sector reform is what to do with the current workforce.

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

Balancing Brazil’s books

Brazil’s government first brought the constitutional reform bill to congress in September 2020 in a bid to reduce spending on public sector salaries and pensions. In 2019, spending on public sector pay and benefits reached almost 14% of the country’s GDP, the 15th highest spend of 142 countries according to World Bank data.

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

For the bill to pass, three-fifths of the plenary will need to give its support, a prospect thought to be likely due to the country’s swollen budget deficit. Though the current deficit is 65% down on the previous year, it is still uncomfortably large at R$73.6bn (US$14.5bn). 

With an election looming in 2022, Brazil’s government is having to push hard for reforms to keep private investors confident in its ability to scale back the state. It has promised investors a break-up of monopolies, as well as the marketisation of key utilities and postal services.

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

About Jack Aldane

Jack is a British journalist, cartoonist and podcaster. He graduated from Heythrop College London in 2009 with a BA in philosophy, before living and working in China for three years as a freelance reporter. After training in financial journalism at City University from 2013 to 2014, Jack worked at Bloomberg and Thomson Reuters before moving into editing magazines on global trade and development finance. Shortly after editing opinion writing for UnHerd, he joined the independent think tank ResPublica, where he led a media campaign to change the health and safety requirements around asbestos in UK public buildings. As host and producer of The Booking Club podcast – a conversation series featuring prominent authors and commentators at their favourite restaurants – Jack continues to engage today’s most distinguished thinkers on the biggest problems pertaining to ideology and power in the 21st century. He joined Global Government Forum as its Senior Staff Writer and Community Co-ordinator in 2021.

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