The need for reforms is a consensus among advisors to pre-candidates for the presidency

Despite the controversy raised by the PT over the labor changes in the Temer government, the economic advisers of the main candidates for the Presidency of the Republic – from the left and the right – agree on the need for the elected official in 2022 to implement reforms.

In interviews with leafthe advisers of the pre-candidates mainly mention tax and administrative reforms and mention as objectives the cut of expenses, the simplification of the Brazilian legal framework and the stimulation of private investment.

Even in the PT — which recently talked about reviewing the Michel Temer government’s labor changes and taking a stand against the administrative reform presented by the Jair Bolsonaro government — changes in the civil service rules are defended to cut costs with civil servants’ salaries.

“After Social Security, the biggest federal expense is payroll. So the next government will have to carry out an administrative reform for new entrants”, says Nelson Barbosa, former Minister of Finance (at the end of Dilma Rousseff’s government) and member of the group of economic advisors to pre-candidate Luiz Inácio Lula da Silva (PT).

Barbosa, who is also a columnist for leaf, argues that the administrative reform does not need to interfere with the rights of current civil servants. “As the renewal rate is going to be high, with many close to retirement, in four or five years these rules will be in effect for most servers,” she says.

The aim of the reform would be to lower entry salaries into the public service and prolong career progression. Discussions about job stability would not be on the agenda.

“THE [atual] government started the discussion for the stability of the public servant, and that stopped the reform”, he says.

“There has to be stability, otherwise there will be political interference [na seleção dos servidores]there will be crack [prática criminosa em que funcionários públicos entregam parte de seus salários aos superiores]”, says Barbosa.

Tax reform is also seen as a priority by the PT economist, who defends a fiscal adjustment that also considers the public revenue side — but gradually.

“Without reinventing the wheel, economic history shows that successful adjustments distribute the values ​​between income and expenses”, he says. “But the government [atual] want to do it with the pen, from one hour to the next. The rich can pay more, but it cannot be done right away. It has to be a gradual implementation,” he says.

Barbosa agrees with the proposal sent by the government to Congress, which unites PIS and Cofins in the new CBS (Contribution on Goods and Services). “I think it’s correct,” he says.

And it also agrees with the broad reform proposals authored by Congress — such as PEC (Proposed Amendment to the Constitution) 110, which in the current version promotes a major merger of taxes and creates a new federal tax and another for states and municipalities (the called dual VAT).

Minister Paulo Guedes (Economy), who has not yet been confirmed as an advisor to Bolsonaro’s campaign, has persisted in the reform agenda – such as tax and administrative reforms, in addition to privatizations. For him, the president has to insist on the agenda to differentiate himself from rivals and win votes.

“If we don’t privatize, don’t sell, people will think ‘who are we going to vote for, [se for] to stop everything, the way it used to be, state-owned, everything the same as it always was?'” Guedes said last month. “We have to rotate, we have to follow our agenda,” said the minister.

Affonso Celso Pastore, economist of the pre-candidate Sergio Moro (Podemos), says that the reforms are necessary to cut spending and accelerate economic activity. He specifically cites tax reform.

“The resumption of growth requires a broad program of reforms that include, among others, the taxation of goods and services and the Income Tax”, says Pastore.

In his view, the reform should eliminate important distortions — such as the fiscal war between states and the penalization of manufactured exports because of the inability to recover tax credits.

“The most important tax reform is the one that unifies all taxes on goods and services in the form proposed by the PEC [proposta de emenda à Constituição] 45, pending in the Chamber”, he says.

Mauro Benevides, an economist who advises the pre-candidate Ciro Gomes (PDT), says that the first reform to be sought is the tax reform.

He advocates creating more income tax bands to tax the richest, measures to avoid pejotization, raising taxation on inheritances and focusing more on patrimony — including abroad.

“Do you think it’s fair for a car to pay IPVA and an airplane or a helicopter not? You have to have a change in equity”, he says.

In addition, he wants to cut spending on subsidies by between 10% and 15% — even revising the basic food basket rules. “In the basic basket, there is Swiss cheese and filet mignon, which belong to the rich class”, says

Benevides also advocates an administrative reform, to lower career entry salaries and prolong the rise to the top. “[Hoje]in most careers you are at the top of your career after 18 years — out of a total of 30, 40 years of exercise,” he says.

Henrique Meirelles, economic advisor to pre-candidate João Doria (PSDB), presents a liberal program similar to that presented by Guedes in the 2018 campaign.

Meirelles wants to implement administrative and tax reforms, in addition to preaching the divestment of state-owned companies, infrastructure concessions to the private sector and the gradual opening of the economy.

“In the state of São Paulo, we carried out an administrative reform and we have from now until the end of 2022 R$50 billion in cash to invest. [no âmbito federal] an administrative reform like here, where we closed five state-owned companies with cost cuts, this already generates effects in the following year”, he says.

Minister of Finance in the Temer government, Meirelles was responsible for a labor reform in the period and sees it as possible to implement another round of changes in the area. “You can, later on, do something in the labor reform, yes,” he says.

Controversial in the Brazilian political debate, the flexibilization of Brazilian labor legislation is defended by entities with liberal guidelines such as the World Bank to facilitate hiring and increase productivity.

For Meirelles, the difference between his platform and that of the current government will be the delivery capacity. “It is enough to have a government that has the disposition, the leadership and the decision to carry out reform as we did in São Paulo”, he said.