President Michel Temer’s government is far from assembling the the needed votes to pass a landmark pension reform, but according to some government sources, he and his allies have recently grown more optimistic about the reform’s chances.
Pension reform potential supporters of are now more organized then they were two weeks ago: “we have a party leader committed, a party chairman committed, one party that’s set to commit,” Brazil’s lower house speaker, Rodrigo Maia said on Monday (Dec.4).
If rules don’t change, by 2030 the pension system will be consuming the entire federal budget, leaving no money for any other type of expenditures, said recently the World Bank. Nowadays Brazil spends 4 per cent of GDP on public service pensions alone, a ration that is higher even than Greeces’s.
But if pension reform is the cornerstone policy in President Temer’s efforts to bring Brazil’s fiscal situation under control, the measure is also widely unpopular with Brazilians. Under the current system, public workers can retire as early as their mid-50s on full salary.
The system is also blatantly unjust, as the federal government spends nearly 2 per cent of GDP on pension benefits for 1 million retired public servants, on average eight times more per person than it spends on private sector retirees.