Brazilians are bracing for a major political shift when far-right leader Jair Bolsonaro is sworn into office next week as president. Among the promises he made during his campaign — overhauling the country’s pension system — a move opposed by many workers. CGTN’s Paulo Cabral has details.
Walter Morales retired recently – just as he completed the minimum 35 years of work to be eligible for a state pension. Working for another five years would add about 250 US dollars per month to his income. But with pension reform looming – and the potential for big changes to benefits – and a higher minimum age for retirement – Morales wanted to be on the safe side.
“I began to feel insecure with all the news about the changes,” he said. “What if I lost my job? I am 50 now and it’s not easy to find a new job at my age.””
Outgoing President Michel Temer’s administration drafted a bill to reform the pension system in the wake of Dilma Rousseff’s impeachment- but couldn’t gather enough Congressional support to get it approved. Now, financial markets and those in the business community are waiting for Bolsonaro to take his shot at pension reform – hoping for a better outcome.
“It’s a must condition to his government,” said Joao Mauricio Rosal, an economist with Guide Investments. “All the fiscal problems that we have in the country as well, if we really want to fix it goes through this agenda, of reforming the pension system. There will be a search for a consensus in other to pass these measures through and we have to be careful and see whether this consensus will have a meaningful impact in the fiscal accounts or not. Then at the end of the day it’s about politics.”
The bill drafted in Temer’s government created a minimum retirement age of 65 for men and 62 for women — and reduced pay limits for civil servants, among other generally unpopular measures strongly criticized by Brazil’s Leftist parties and trade unions.
This Sao Paulo council member and leader of the city’s teacher’s union says the government should fund the system through higher taxes on business.
“There are many changes happening with technology and automation,” said Claudio Fonseca, the president of the Sao Paulo Education Workers Union. “The net profits of companies have significantly increased — so the taxes to fund Social Security and the Pension Systems should not be based on payrolls only, the way we do now. The profits of the companies must also be taxed to fund them.”
That’s not a plan likely to sit well with the pro-business Bolsonaro, who has promised to change the pension system one portion at a time, beginning with an increase to the minimum retirement age. He sees such a piecemeal approach as the best way to push them through Congress. And the world will be watching, to see whether he can deliver where others have failed.