Guedes: Brazil’s Administrative Reform Could Have Impact of R$300 Billion in Ten Years

RIO DE JANEIRO, BRAZIL – Minister of Economy Paulo Guedes estimated on Wednesday, September 9th, that the administrative reform submitted by the government to the National Congress last week could have an impact of almost R$300 billion (US$60 billion) in ten years. He said the reform focuses on increasing productivity in the public sector and digitalizing services.

“When you give a digital shock, the replacement rate drops sharply. If ten people retire, we will hire one or two,” he said. “The replacement rate will be around 60 to 70 percent, but in these first years, we’re at 20 percent. We’ve stepped on the brake after years of many contracts,” he added.

He explained that the administrative reform will not impact current civil servants as requested by President Jair Bolsonaro. “The President asked that the administrative reform should not impact acquired rights, because the people applied for tenders, contracts. On the other hand, he authorized us to work hard on the future. We looked to a constructive future, with increased productivity and digitalization,” he said.

As a result, the administrative reform should run a relatively smooth course in Congress, the Minister said. “The reform should be passed later this year in Congress, not least because it met political requirements. If Congress wants to tighten the reform, it will, if it wants to ease it, it will. But we think that the administrative reform is in the measure to be passed,” he added.

Although the proposal submitted by the government is not yet addressing civil servants’ salaries or careers, Guedes advocated raising the highest public administration salaries at the same time as reducing the salaries of new entrants.

“I find it absurd that the salaries of senior Brazilian administration are very low. It will be difficult to retain quality employees in public service. There needs to be a huge difference in salaries in public administration. (Ex-Treasury Secretary) Mansueto Almeida was earning only 20 percent more than a young man who has just joined the firm,” he added.

The Minister also argued that career progression in public service should be based on meritocracy, and recalled that it will fall upon each regulatory category to establish time criteria for stability and rules for career path progression. The bills for regulating careers will be submitted only in the later stages of the reform. “Career progression in public service must be based on meritocracy. We only provide the reform’s overall structure, each career will regulate it,” he added.

Source: Estadão Conteúdo