Illustration by André Chiavassa/TBR

Why is the Brazilian government pushing public sector reform during a historic crisis?

What you need to know about Jair Bolsonaro's administrative reform

The Brazilian government presented its plan to reform Brazil‘s civil service. And while it left much to be desired — as it doesn’t affect current servants and keeps intact most of the privileges granted to Congress and judges — the plan could potentially change public service in Brazil, not only at the federal level, but also for states and municipalities. And if passed it would grant more powers to the president.

Brazil spends 13% of its GDP on the salaries and pensions of public servants, the 15th-most among the 142 countries analyzed by the World Bank. A reform has been talked about for decades, and now it is finally set to be debated in Congress. But will it pass? And, more importantly, if it does, which elements will be preserved?

Last week, The Brazilian Report launched a special series on the reform, explaining its main points, how hard it will be to approve it in Congress, and the impacts on many industries that depend on the current structure of the Brazilian state. Through our content partnership, LABS is republishing this first installment, in which we highlight the key points of the reform presented by President Jair Bolsonaro.

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What you need to know about the government’s administrative reform

The administration was expected to present its reform late last year, but President Jair Bolsonaro decided against it, due to fears that the strong civil servant lobby would launch militant protest actions similar to those happening at the time in Chile. And as we dissected the proposal, we noticed many points could spark mass anger among public servants.

Job stability for civil servants

One of the key points in the government’s reform is to end the undisputed job stability of public servants — making it easier for them to be dismissed. 

Today, any civil servant is granted ironclad job security after three years of service. While the 1988 Constitution mandated periodic performance evaluations — these were never enforced. Only a court order or strict disciplinary process can remove public servants from their posts. Since 2003, just over 7,500 servants have lost their job — mainly due to accusations of corruption.

In many cases — especially for judges — the worst punishment is compulsory retirement (but even so, the servant keeps all their pension benefits). That will no longer be allowed.

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Now, evaluations come to the forefront — and all servants will undergo a trial period (one year in most cases and two in strategic positions) after which they can be dismissed if showing a subpar performance.

Only “typical careers of state” would be entitled to this benefit, and only after a three-year probationary period. Congress is supposed to determine which categories fit the description, but it is safe to assume that law enforcement, tax auditors, and diplomats will be granted this special status.

Private contractors

Another point that might ruffle many feathers is allowing public administrations at all levels to sign “cooperation instruments” with public and private institutions to execute public services. And that allows private contractors to be employed under specific conditions to be determined by lawmakers. Only in activities performed by “typical careers of state” would the use of private workers be off-limits.

“Obsolete” workers

According to the government’s proposal, the Executive branch on all levels — federal, state, municipal — can fire civil servants whose job attributions “have become obsolete.” That point will be highly contested by public sector unions, as it could impact thousands of workers.

However, there is an additional interpretation of this rule which could be even more contested. If a job is performed by private contractors — as established in the previous item — then administrations could declare a certain position as “obsolete” and scrap it altogether.

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Perks and benefits

The proposal overhauls all the benefits public servants enjoy — although changes will only go for future servants. Here are the main points:

  • Perhaps the biggest change is lifting the possibility of automatic promotion for time of service. The reform also ends the possibility of retroactive salary bumps;
  • Public servants will no longer be able to take vacation of over 30 days within a year;
  • A high-ranked servant under leave of absence for any reason outside of health issues will no longer be able to receive compensation in line with their position;
  • Public servants will no longer be able to accumulate multiple paying jobs, with the exception of teachers.

Enhanced presidential powers

Under the argument of reducing red tape, the administrative reform proposal gives enhanced powers to the president, who would be able to enact changes to public service as long as they don’t raise public spending. This includes creating, merging, transforming, or extinguishing ministries and other institutions in the Executive branch.

The head of state would also be allowed to slash positions, reshuffle vacancies (the president could transfer vacancies to hire people in other ministries) , and reorganize job descriptions.

Every reform has some aspect that seems like pushing too far — usually meant only to work as a bargaining chip. Something the government knows won’t pass, and would be dropped as a token of the government’s goodwill in a negotiation table with parties. 

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The government’s strategy seems to be focused on administrative reform, as it seems highly unlikely that Congress would waive its prerogative to approve or bring down presidential acts that reshape the government’s structure. Especially in a moment when tensions between the government and Congress are so high — to the point that House Speaker Rodrigo Maia declared that he no longer speaks to Economy Minister Paulo Guedes.

The Covid-19 crisis has made the Bolsonaro administration aware of the need to enhance public spending on welfare programs. But to avoid ballooning the deficit, major cuts will have to be made — setting the stage for the administration to push reforms that have been promised since 2018. 

As the old political adage goes: one must never let a good crisis go to waste.

This article was originally published on The Brazilian Report, a website that explains Brazilian politics and economics to foreign audiences.