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News > Latin America

Bolsonaro To Cut 'Costly' Pension to Control Budget Deficit

  • President-elect Jair Bolsonaro.

    President-elect Jair Bolsonaro. | Photo: Reuters

Published 6 November 2018

Bolsonaro's economic reform plans include cutting down pension and introduce tax cut slowly. 

Brazil’s far-right President-elect Jair Bolsonaro said Monday that he will take apart the country’s “costly” pension system soon after he takes office on Jan. 1, 2019.


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This move will be to bring the government’s unsustainable budget deficit under control. Bolsonaro’s team of orthodox neoliberal economists want to resolve the budget deficit soon to, they argue, get investment flowing again, spur economic growth, and create new jobs.

Bolsonaro’s future economic minister, University of Chicago trained economist Paulo Guedes would like to see a part of pension reform proposal already passed in Congress before Bolsonaro takes office.

“If we cannot get anything approved this year, we will do some kind of reform at the beginning of next year,” Bolsonaro said in an interview with TV Band.  

A Chicago Boy (University of Chicago graduate), Guedes has known ties with the group of economists that designed the ultra-liberal economic reforms applied by Chilean dictator Augusto Pinochet.  

The Chicago Boys are credited with opening Chile up to free-market economics at the cost of the Chilean people after a bloody military coup against democratically-elected President Salvador Allende.

Bolsonaro also plans to cut tax in a “responsible way” and ruled out reviving a despised tax on transactions known as the CPMF to raise fiscal revenues.

The CPMF tax was introduced in 1993 as a temporary measure to subsidize Brazil’s public healthcare system charged 0.38 percent on all financial transactions, including checks.

Bia Kicis, a close aide of Bolsonaro, said that he will also launch a public safety plan which would crack down on violent crime and advance other conservative measures.

These measures will include giving more power to police to fire on armed criminals, easing gun controls, reducing the age from 18 to 16 at which people can be prosecuted criminally, enacting legislation that makes land invasion acts of terrorism, and a bill to remove politics and teaching of sexual diversity in schools.

“This agenda cannot be delayed because Bolsonaro was voted in for these reasons,” Kicis, a retired Federal District prosecutor, said in an interview.

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