On Tuesday (May 15), President Michel Temer released a report taking stock of the two years of his administration. On May 12, 2016, then vice-President Michel Temer occupied the country’s top political post after the ousting of then-President Dilma Rousseff.
In addition to the reduction in interest and the lower inflation—implemented as top priorities in Temer’s administration—the government managed to have the cap on public spending approved by the Senate in December, 2016.
The legislation stipulates that the government, Congress, the agencies subject to the Prosecution Service and the judiciary branch must not spend in a year more than the amount spent the year before, corrected for inflation (payment of the public debt not included).
Early this month, in an interview with Empresa Brasil de Comunicação (EBC), the president referred to the move as part of the efforts for balancing out public accounts.
“That’s a trivial formula. Spending can’t surpass revenues. It’s like a family. You can’t spend more than you make. No one had dared to do such a thing for a long time. And we did it in a highly responsible manner,” Temer said.
Zeina Latiff, head economist at XP Investimentos, believes that the constitutional amendment strengthened the commitment with the fiscal adjustment, necessary in the crisis-stricken scenario the country was facing. “It forces politicians to discuss public policies and ensure this commitment with the fiscal adjustment. When the country deals with fiscal problems and there’s no perspective for an adjustment, a cap on public spending helps hold things in check.”
Eblin Farage, head of the National Union of Higher Education Professors (Andes-SN), argues that the change made a negative impact on the budget for a number of public policies, like those aimed at education. “The amendment disregards all special needs in education. By introducing a cap, it makes cuts. From one year to the next, hikes are everywhere to be seen, including the costs necessary for a university to remain in operation,” he noted.
In the coming months, the challenge faced by the government lies in boosting the number of formally registered workers. Data from the Brazilian Institute of Geography and Statistics (IBGE) show that Brazil had 13.1 million jobless people in the first three months of this year.
Approved in July 2017, the labor overhaul, also considered key by the government, changed over a hundred items in Brazil’s legislation on labor.
The changes determine the prevalence of jointly established conventions and deals over the law in a number of aspects, making workdays and the working routine more flexible and redefining how judicial cases are conducted. The reform sparked a lot of controversy, brought employers and workers against each other, and divided the opinions of trade unions.
José Ricardo Roriz, vice-president at the São Paulo Federation of Industries (Fiesp), describes the reform as a step forward. “It was positive not just for the modernization of Brazilian laws, but also because it removes the intermediate role of the state in negotiations between employer and worker. The industry as a whole regards it very positively,” he stated.
In the view of trade unions, the overhaul is a setback. “The main argument backing the reform was that it would be important to cut social security taxes and increase employment. It boosted unemployment in the country, whereas most of the posts created are intermittent jobs [on demand work paid by the hour, with no fixed remuneration or schedule],” said Graça Costa, secretary for labor relations at the Unified Workers’ Union (CUT).
Over the course of these two years, Temer was targeted by allegations filed by federal prosecutors for his alleged involvement in the embezzlement of funds from state-run oil giant Petrobras and obstruction of justice. The lower house did now grant permission for the Supreme Court to follow through with the probe.
The Federal Police is investigating whether Rodrimar was illicitly benefited by the so-called Ports Decree, signed by the president, who says the suspicions are unfounded.
In April, Temer made a pronouncement dismissing the charges. In his interview to EBC, he rebutted the accusations and ruled out the possibility of a third inquiry. “The two charges [lodged in 2017] were despicable. So much so that both congressional houses were quick to reject them—not reject them, but stop them from advancing any further. This so-called third allegation is a campaign mounted by the opposition.”