Millenium Institute: Brazil Spends 3.5 Times More on Civil Servants Than on Health

RIO DE JANEIRO, BRAZIL – On Monday, August 10th, the Millenium Institute released a study according to which Brazil spent 13.7 percent of its Gross Domestic Product (GDP) in 2019, about R$930 billion (US$186 billion), on federal, state, and municipal civil servants.

According to the study, the country’s spending on civil servants is twice that on education and 3.5 times that on health (3.9 percent of GDP).

Based on data from the International Monetary Fund (IMF), the institution reported that Brazil was the country to spend the seventh-most on government personnel in 2018, out of 64 nations surveyed.

“The country is close to Norway and Iceland and is ahead of Sweden, both with per capita GDP – between 5 and 7.5 times more – and much higher levels of development. Colombia, Chile, and Peru, with closer realities to Brazil, have their spending on staff around six points of GDP. Not even France and Germany spend on staff at the same rate as Brazil,” the study reported

“Federal employment, which is the most burdensome, costs Brazil 4.26 percent of GDP. It should also be noted that the country invests only 0.20 percent of GDP in sanitation, so the country is home to over 100 million people without access to basic sanitation, with about 35 million of them deprived of drinking water,” the document adds.

Earlier this year, President Jair Bolsonaro said he would submit the administrative reform bill in February, but the text has not been forwarded to Congress.

In a note, the Ministry of Economy stated that the administrative reform is “a critical part of the set of structural reforms to be forwarded to Congress, observing the political calendar and the coordination with the National Congress”.

According to the study, the percentage of government jobs in relation to the formal job market is 21 percent.

According to the Institute, this level places Brazil among the top five countries, “virtually tied” with France, losing only to Lithuania, Finland, Denmark, Sweden, and Norway.

“Moreover, Brazil has been growing below the average of emerging countries since the 1990s. Chile, despite its recent troubles, still has a per capita income twice that of Brazil. The information provided to date shows that the administrative problems of the public sector have some link to the development and fiscal situation of Brazil [worsening of public accounts],” he added.

Budget ‘increasingly earmarked’

In the document, the Millenium Institute also notes that Brazil has a public budget “increasingly earmarked”, with 93 percent of compulsory expenses (65 percent earmarked for salaries and retirement expenses).

“And this certainly impacts on the maintenance of low public investment, which tends toward zero, as well as the non-fulfillment of the golden rule – the use of indebtedness for costing or spending,” it adds.

The study recalls that, according to the Federal Treasury, 14 Brazilian states exceeded the limit of 60 percent of net current revenue in payroll expenses, including payments to retirees, in 2017.

As a result, in 2018, the institution estimated that this growth trend tends to “impair the operation of state governments’ basic services.”

Campaign for administrative reform

Spending on public servants is mandatory, i.e. it cannot be changed without statutory amendments. The Millenium Institute, which included the Minister of Economy, Paulo Guedes, among its founders, launched on Monday the campaign “Destrava! Por uma Reforma Administrativa do Bem” campaign. [Unlock! For a Positive Administrative Reform]

“The Coronavirus pandemic has driven the deterioration of public accounts. This scenario places Brazil at a crucial time to make decisions with clear consequences for its future. At the heart of this issue is the urgent administrative reform,” says the Institute.

It explained that the campaign’s goal is to encourage the debate around a “model with more equality, innovation, and transparency, in addition to a better environment for all civil servants.”

Paulo Uebel, Special Secretary of Debureaucratization, Management and Digital Government of the Ministry of Economy, announced earlier this year that the economic area would be presenting its first stage of the administrative reform proposal in February.

He said at the time that the full proposals would be submitted in stages and that everything was expected to be passed by the end of 2020. But the document has not yet been forwarded to the legislature.

In its note, in which it argued the importance of the reform, the Ministry of Economy stressed the impact of the changes on public accounts in all spheres of government, but failed to provide a date for sending a proposal.

“Like the pension and tax reforms, the Administrative Reform has a high social impact in that it promotes a more efficient State, optimizes resources, values the civil servant committed to serving society, and, above all, improves the quality of public services. The impact of the administrative reform will benefit all Federal Powers and all bodies, both within the Federal Government and in the states and municipalities,” says the portfolio.

Rodrigo Maia, president of the Chamber of Deputies, supports the reform and has repeatedly called for the government’s proposal in recent months.

Last year, the Ministry of Economy reported that it considered relaxing the rules for hiring new civil servants, by hiring employees under Brazilian labor laws for private employees, and temporary employees through bids, as well as proposing a lower salary for new employees, greater progression and a reduction in the number of career paths in the federal civil service.

Source: G1