The Brazilian government’s plans to overhaul its pension system can still be saved if lawmakers reverse changes to transition rules and concessions to legislative aides, according to Economy Minister Paulo Guedes.
Guedes heavily criticized a congressional committee’s report last week, which cut the bill’s targeted savings over the next decade to around 860 billion reais (US$ 221 billion) from 1.237 trillion reais, according to Economy Ministry calculations.
Guedes said 100 billion reais of savings could be recovered by tightening up rules for the transition to the new pension system, which he said had been loosened due to lobbying by lawmakers’ own staff.
That would bring total savings up to 960 billion reais, close enough to the 1 trillion mark Guedes and other government officials have insisted is needed to pack the fiscal punch that will turn Brazil’s financial and economic fortunes around.
“With spending reduced by 860 billion reais, plus another 100 billion ... we have 960 billion. Then we can look at a new pension reform proposal,” Guedes said.
The congressional report projected total savings of 913.4 billion reais over the next decade with its proposed changes, but Guedes said lawmakers were including a bank tax, which he considered a separate issue.
Guedes slammed the changes, saying they killed hope of a meaningful pension reform and warning that Brazil would find itself in the same perilous fiscal spot again within six years.
His comments drew sharp rebuke from Rodrigo Maia, the speaker of the lower house of Congress, who called the government a “crisis factory” and said the collective will of the people had prevailed over the wishes of one person.