The federal government has decided to raise salaries of all federal civil servants by 5% from July. According to sources, the decision was made on Wednesday afternoon, during a meeting between Chief of Staff Ciro Nogueira and Economy Minister Paulo Guedes. The decision had the backing of President Jair Bolsonaro.

President Bolsonaro had promised to raise the salaries of federal police officers, federal highway patrol officers and employees of the prison system. But other groups had been threatening to go on strike if they were not also contemplated. In the middle of an election year, Mr. Bolsonaro ended up giving in.

As there is not enough money within the spending cap to an across-the-board salary increase, it will be necessary to reallocate funds from other segments, according to government sources. The 5% increase for all federal civil servants would cost something like R$5 billion to R$6 billion this year, according to information circulating among the technical staff. This is more than the amount set aside in the 2022 budget for this purpose: R$ 1.7 billion.

In order to create conditions to have a higher spending on salaries, the government needs to cut expenses. The preferred target of these cuts are parliamentary amendments to the budget. Officials have been scanning the budget in recent weeks to find expenses that could be cut.

The idea of a 5% adjustment was not the preferred option of Mr. Bolsonaro, who intended to please the police, particularly prison guards. The amount of R$1.7 billion was originally intended for this group, but the president was warned by Mr. Guedes that granting an increase for only part of the servants would be like pulling a grenade pin.

The associations that represent civil servants reacted negatively to the proposal. “This is completely unsatisfactory,” said Rudinei Marques, president of the Permanent National Forum of State Careers (Fonacate), which represents the civil service elite. According to him, the mobilizations “will intensify until mid-May, when we understand that the Provisional Measure will need to be sent to Congress to be converted into law.”

Source: Valor International

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