The Brazilian Government is planning to offer Public Servants an across-the-board five per cent salary increase beginning in July.
Sources in the Ministry of Economy, who requested anonymity as the discussions had not been finalised, said it was an attempt to end protests and strikes which were affecting public services.
According to the sources, the increase will cost the Federal Government around six billion reais ($A1.7 billion) this year.
Brazil has a constitutional spending cap, so the Government will have to cut other expenses to increase salaries, as Congress approved the 2022 Budget with only 1.7 billion reais ($A490 million) for such raises.
The Government also analysed options within that limit, including boosting meal vouchers by 400 reais ($A116) for all employees, a possibility that has been largely rejected.
Another alternative was to favour a few categories of Public Servants, including those at the Central Bank and Public Revenue Service.
Workers from these Agencies were the leaders in noisy protests after President Jair Bolsonaro said earlier this year that only Public Servants providing public security would be allowed to receive raises.
Behind the scenes, Ministry of Economy officials strongly opposed that idea, arguing that privileging a few could set off a wave of new protests demanding more costly raises.
“The biggest problem was giving raises to one category and not others,” said one of the sources familiar with discussions.
Many public employees have not seen their wages rise in five years and protests have taken place as double-digit inflation erodes purchasing power in Latin America’s largest economy.
A strike by Central Bank employees is delaying the release of economic data, while protesting tax auditors have delayed the processing of goods arriving in Brazil.
Brasilia, 16 April 2022
