The measures range from attacks on the Continuous Benefit Benefit (BPC), the wage bonus and unemployment insurance, to a new pension reform.
To close this edition, the Minister of Finance, Fernando Haddad, met with President Lula in Brasilia to discuss the next fiscal adjustment measures and cuts to workers’ and pensioners‘ rights.
Far from being a surprise, the government has already declared that it will wait for the elections to prepare the package of attacks and send it to the National Congress. Haddad himself revealed to the press in October that he had presented Lula with a series of “coherent proposals” to guarantee the fiscal framework and the goal of zero deficit (collection minus expenditure, excluding interest on the debt). The statement came after a meeting between the minister, Lula and the bankers at Palazzo Planalto.
Cuts and attacks in the service of bankers’ profits
On the occasion, the Minister of Planning, Simone Tebet (MDB), stated that “the time has come to fight fraud and errors, now is the time to carry out a structural review”. He was referring to the cut of R$6,000 million in the continuing allowance subsidy (BPC), which affects more than 670,000 needy elderly people and people with disabilities, who have benefited from this right. A cut disguised as a “revision” that the government is carrying out, above all to make the access criteria more difficult. Now is the time for “structural” adjustment.
According to Tebet, the government has already prepared three packages that will be sent to Congress. These are measures ranging from changing laws to constitutional changes. Aloizio Mercadante, president of the National Bank for Economic and Social Development (BNDES), joined the chorus by defending, at an event aimed at foreign investors, that “the government must cut spending”. According to him “we must consider the objective of investment grade as fundamental”.
“Investment grade” is a classification granted by international market institutions, which guarantees megabankers and large speculators that the country will religiously honor the interest remuneration on the debt. It is imperialism that puts Brazil’s plaque on the wall as “employee of the month”, testifying to the submission and vassalage of the government, to the detriment of workers’ rights, pensions, cuts in social sectors such as health and education, to guarantee bankers profits.
The tax framework takes money from social resources for the benefit of billionaires
The so-called “New Fiscal Framework”, approved by the government last year, replaced the Temer government’s spending cap. However, contrary to what the government and its defenders claim, it is not a measure “less worse” than the Ceiling, but rather a new ceiling, the objective of which is precisely to be maintained in the long term, as the government itself stated Haddad. states.
According to the framework rules, public spending is linked to revenue growth. However, this is not the entire increase, but only 70% of the amount collected above. At the edge of this range, government spending can only grow 2.5% above inflation and the floor remains at 0.6%. That is, it is a movable roof, but this mobility is very restricted.
To give us an idea, with these rules, investments in the coming years will be lower than the average of the Lula 1 and 2 governments, the Dilma government and even the expressly neoliberal government of Fernando Henrique Cardoso (FHC).
This is an austerity rule aimed at removing even more resources from social sectors, including healthcare and education, to ensure debt payments to bankers.
Social and labor rights at the center of attention
What is in fact being plotted inside Palazzo Planalto, together with the bankers, against workers and pensioners? The government has so far refused to make the measures public, but has already made clear that some, if not all, of the proposals have been finalized.
On October 15, the newspaper “O Globo” reported that one of these would be the modification of the FGTS’s 40% fine. [Fondo de Garantía de Tiempo de Servicio]
A week later, in the midst of the controversy sparked by the spread of the news, the government spoke out, in a bureaucratic manner, through a press release, stating that the information was false. Lula, Haddad and Tebet remained silent and the only minister who denied the news, calling it “fake news”, was Luiz Marinho, of the Ministry of Labor.
In any case, some clues provided by the government already indicate what will happen. Haddad and his economic team had already warned that the fiscal framework was incompatible with maintaining constitutional standards for health and education. Furthermore, a number of rights are already in the crosshairs, such as wage bonuses, unemployment insurance and BPC.
See what is being prepared for the anti-worker package:
– End of the 18% minimum income threshold for healthcare.
– End of the minimum threshold of 15% of income for education.
– Increase in the minimum age for BPC, which affects the poorest and most disabled elderly.
– Decoupling the BPC from the minimum wage, adjusted only for inflation.
– New attack on unemployment insurance. Even if news of the FGTS fine forfeiture fades, one change that may be coming is reduced benefit fees, depending on the value of the FGTS fine.
– Limitation of access to the salary bonus, an extra salary that is paid to those who earn up to two minimum salaries. The idea is to consider family income and not individual salary.
– New pension reform: although Haddad denied that a reform of the general pension system was under discussion, he himself stated in September that the categories [gremios] excluded from the latest reform “can contribute to improving public finances”. Minister Simone Tebet was more direct: “We will have to do it out of conviction or out of pain”, she even declared to the newspaper “Valor Econômico”.
– Attack on the Fund for the maintenance and development of basic education and the development of education professionals (Fundeb).
The Lula government is not only unwilling to face the right and the far right, but, in the attempt to guarantee a government of conciliation with the bourgeoisie, in a composition of a very broad front, which also includes the far right, ends up for imposing a neoliberal program and project against the working class.
The fiscal framework, for example, was not approved ”with a knife around the neck”, but, on the contrary, was prepared by the government itself. The project was drawn up at Planalto and the Ministry of Finance and approved with the contribution of the Lira [presidente de la Cámara] and the Center [los representantes de los considerados partidos de centro]at the cost of billions in parliamentary amendments [dinero que se les paga para que aprueben las enmiendas].
The Lula government has shown increasingly clear signs of acting with and for the bourgeoisie, imperialism, big bankers, international investors and even big agri-food business, as part of its national program and project.
The partnership program [Asociaciones] and Investments (PPI), for example, deepens privatization across the country, with federal support, through the BNDES. The recent attack on the BPC, in turn, has given an air of perversity to this neoliberal agenda, as it targets precisely the poorest and most vulnerable population.
The speeches that Lula and even Haddad give abroad, at the United Nations (UN), at the International Monetary Fund (IMF) or at the World Trade Organization (WTO), against inequalities and billionaires, are exactly the opposite of this that they impose here.
The anti-worker package now increases the fiscal framework and attacks the historic rights of an increasingly impoverished and precarious working class. Thus every trace of the thesis of an alleged contested government disappears.
The left that defends that the task set is to support the government “against fascism”, accepts these limits, acts against the formation of a left opposition and ends up, itself, contributing to encouraging the far right itself.
The government will soon announce details of the anti-worker package. It is necessary to start organizing the mobilization against these attacks now. It is necessary to organize the working class, the precarious and oppressed sectors, against these attacks and for the end of the fiscal framework and all the cuts and fiscal adjustment measures thrown on the shoulders of the poor.
In this process it is necessary to build, together with the working class and the poor, a left, revolutionary and socialist opposition that opposes this neoliberal policy. A policy which, in addition to targeting the poorest to the benefit of capitalist billionaires, increasingly fuels an extreme right that is growing in the face of the decadence and crisis of the system.
Article published in www.opiniaosocialista.com.br31/10/2024.-
Translation: Natalia Estrada.
WTO), reflect a commitment to policies that prioritize fiscal responsibility and the interests of investors over social welfare. While they present a narrative of economic growth and stability, the underlying actions signify a clear shift towards austerity measures that will adversely affect the most vulnerable segments of the population, including the elderly, people with disabilities, and the working class.
The recent statements and proposals from government officials highlight a strategy that seeks to reassure bankers and international lenders rather than address the pressing needs of social sectors such as education and healthcare. The reduction in subsidies, along with cuts to essential social programs, aligns with a broader trend of prioritizing debt repayment at the expense of public services.
The rhetoric about ’structural adjustments’ and the push for an ‘investment grade’ rating serves as a narrative device to justify austerity measures that, as history has shown, often lead to increased poverty and inequality. By framing these cuts as necessary for economic stability, the government obscures the reality that the sacrifices are being made by those who can least afford it.
Furthermore, the focus on changing laws to facilitate spending cuts, particularly in areas that support the most marginalized communities, raises significant ethical questions. The removal of minimum thresholds for healthcare and education funding, changes to unemployment benefits, and potential pension reforms suggest an alarming trend where financial metrics are prioritized over human needs.
the current government’s approach appears to reflect a strategic alignment with corporate interests and wealth preservation at the potential cost of societal well-being and human rights. The proposed changes, whether through explicit cuts or reforms, signal a broader neoliberal agenda that threatens to unravel decades of progress in social policy and workers’ rights, raising concerns for the future of Brazil’s democracy and social fabric.