The Social Security reform is based on combating inequality and reducing privileges, Economy Minister Paulo Guedes said today (8). Accompanied by secretaries, he participates in the first public hearing of the special committee of the Chamber of Deputies, which discusses the proposed amendment to the Constitution.
According to Guedes, the current system, besides being doomed to failure because of the aging of the population, transfers income from the poorest to the richest. He said it was up to Congress to make the pension and pension system more republican.
“Congress should move towards a more egalitarian system. A system where everyone retires with the same possibilities. Nobody earns less than a minimum wage, now no one earns more than the ceiling. Be it a politician, a housewife, a maid, all converge to a republican welfare. This is in the hands of Congress to vote,”said the minister.
The Minister of Economy, Paulo Guedes, participates in a public hearing in the Special Committee of the House that analyzes the proposed amendment to the Constitution of the Social Security reform (PEC 06/19).
Minister of Economy, Paulo Guedes, during a public hearing at the special committee on pension reform – Pablo Valadares/Chamber of Deputies Speaking at the opening of the special commission session, Guedes explained that Brazil currently spends R $750 billion a year on Social Security, more than three times the annual spending on health, education and security. In the states and municipalities, he pointed out, several local governments spend more than 70% of net current revenue on staff, with expenses inflated because of employee welfare. He recalled that the average retirement of the servants of the Legislature is around $28,000, 20 times more than the average benefit of $1,400 for the retiree of private initiative.
“We spent approximately R $750 billion with Social Security this year alone. That’s seven times more than we spend on education, which is the future. Four times more than we spend healthily. Three times more than with health, education and public safety, added. More than 50% of federal public spending is with Social Security,” said the minister.
Guedes recalled that the National Social Security Institute’s Social Security Institute (INSS) deficit, which includes private and state-owned workers, is around R $190 billion. In the states and municipalities, the Social Security of local servers has a deficit of R $100 billion. According to the minister, the deficit is around R $50 billion for the Social Security of local servers and around R $20 billion for the military.
The minister reaffirmed that payroll taxation contributes even more to the imbalance. This is because labor charges make it more difficult to create jobs with a formal contract, creating a mass of 50 million Brazilians who live in the informal sector and do not contribute to Social Security. He also stressed that the current system mixes Welfare and social care.