The readjustment policy of the minimum wage should be reviewed and the salary allowance defunct, to rebalance the government's accounts after the approval of the Social Security Reform. The suggestions are contained in a document from the Ministry of Finance with an overview of the current management and recommendations for the next government, available on the folder's website.
The folder also recommends controlling public spending, with the reduction of privileges and tax incentives for sectors of the economy, review of spending on civil service and directing social benefits to the poorest to reduce the inequality. According to the document, the minimum wage, whose readjustment policy will be replaced in 2020, must be compatible with private sector wages and the tightening of public accounts.
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Since 2011, the minimum wage has been readjusted based on the inflation of the previous 12 months by the National Price Index Consumer (INPC), plus the variation of the Gross Domestic Product (GDP, sum of goods and services produced in the poais) of two years before. If the GDP result is negative, the correction is made only by the inflation index. This policy will remain in effect until 2019, being replaced the following year.
According to the Ministry of Finance, each R$1 increase in the minimum wage increases Union spending by R$304 million. The impact of most of these expenses stems from the readjustment of the floor paid by Social Security. The new policy for calculating the minimum must be forwarded by the future government by April 15, when the 2020 Budget Guidelines Law (LDO) project will be presented.
Regarding the salary bonus, the Treasury recommended the extinction of the benefit as it understands that it does not serve the population in extreme poverty, but only employees with a formal contract.
Expected to consume R$ 19.2 billion next year, the allowance is paid to workers who earn up to two minimum wages with formal contract, as long as you have worked at least 30 days in the base year of calculation and have a work card for at least five years. The value varies from R$80, for those who worked only for 30 days, to a minimum wage (R$954), for those who worked for 12 months in the previous year.
To increase the efficiency of social spending, the Ministry of Finance, which will be transformed into the Ministry of Economy in January, recommended additional measures, in which also include the review of the Benefit of Continued Provision (BPC), granted to the elderly and people with disabilities, the transfer of rural retirement from Pension for social assistance and changes in the military's social security regime, with the possible collection of contributions on pensions and military earnings inactive.
For the Treasury, the BPC, which pays a minimum wage to the disabled and those over 65, is less effective than Bolsa Família in reducing poverty and has a high level of judicialization (frequently questioned in court).
Next year's budget reserves R$59.2 billion for the BPC, which will be paid to 4.9 million beneficiaries. While Bolsa Família, which pays a fixed amount per dependent and is less than the minimum wage, will allocate R$ 29.5 billion to 13.6 million families.
According to the Treasury, Bolsa Família is the most effective program to reduce poverty because 44.3% of resources are allocated to the poorest 20% of the population. Social Security goes in the opposite direction: 40.6% of the benefits paid go to the richest 20%, against only 3.3% of the resources for the poorest 20%.
Finally, the Treasury proposes a reform of the Severance Indemnity Fund (FGTS), in order to use the fund's resources to finance partially unemployment insurance and increase the profitability of the accounts, which currently pay 3% more Referential Rate per year, plus participation in profits.
The folder also suggests the extinction of the FGTS Investment Fund (FI-FGTS), which finances selected projects by the government and has been the focus of corruption in recent years, as it understands that the free allocation of resources is more efficient. The information is from Agência Brasil.
