Administrative reform needs to be prioritized by the government – 01/06/2024 – Ana Paula Vescovi

The political environment seems willing to bring an administrative reform to the Congress agenda in 2024, which would be great news to start the year. What your content and strategy will be will make a big difference to the goals you want to achieve.

On December 12, 2023, Febraban (Brazilian Federation of Banks) and CNF (National Confederation of Financial Institutions) organized the seminar “Building Consensus: Paths to Administrative Reform in Brazil” in Brasília.

The agenda appears to have entered Congress’ priorities, but is still under discussion within the government and outside the radar of many analysts.

By participating in one of the panels, I was able to express my opinions and collect some observations. The first refers to the political space that was opened for the topic.

Representatives from the Chamber of Deputies, the Federal Senate and the Federal Court of Auditors were present, and they spared no emphatic justifications for their engagement. But as well as strong political presences, the absence of government representatives was notable, as the issue is still under development.

Second, it was important to note the strategy adopted, of taking advantage of the processing of the PEC report (proposed amendment to the Constitution) 32, of 2020, sent by the previous government and approved by a special committee in the Chamber in 2021.

The document substantially changes the original text, proposing three main lines: evaluation of public service results, evaluation of civil servant performance as a requirement for stability and new forms of temporary hiring.

There are other adjustments to the report that seem quite reasonable. I highlight the forecast for a reduction in working hours by up to 25% in specific cases, as long as it is accompanied by the corresponding reduction in wages; and the prohibitions on increasing remuneration or compensation with retroactive effect, on vacations lasting more than 30 days, and on compulsory retirement as a form of punishment.

There is no doubt about the importance of an administrative reform with the three focuses mentioned by the rapporteur of PEC 32/2020.

This is a reform dedicated to the millions of Brazilians who, in some way, depend on State services in education, health, public security, Social Security and social assistance, among other sectors.

It is not a reform dedicated to civil servants, but to those who need these services and support the heavy tax burden in Brazil.

But it could provide public servants truly dedicated to making a difference with a path to monetary recognition for their merit. There will be many people recognized — the examples of performance bonuses in some states and municipalities are valuable — and there will be even more people who will follow the good models.

Additionally, this is not a reform to adjust public accounts, but rather to bring more efficiency to the public sector, which absorbs around 40% of the economy.

There is no way to discuss increased productivity and, therefore, average income in Brazil, without including public administration. A policy of incentives for effectiveness, through the evaluation of results and performance, has long been widespread in the private sector and in other countries.

The very concept of stability, so often remembered when talking about administrative reform, should be linked to an assessment of good performance and commitment to results aimed at improving people’s well-being.

What’s the point of fulfilling the hours worked and receiving remuneration at the end of the month if the services are not impacting the level of well-being as they should? Standardized tests indicate students with low learning, the public system sometimes fails to promote the health of individuals, public security is not effective in bringing confidence to people and companies.

Governments in Brazil do not spend little (more than 1/3 of GDP) in relation to their peers, but they deliver very little for the resources committed. In addition to the design of public policy rules and regulations, the quality of management makes a difference to these deliveries.

Although it is not a fiscal reform in essence, by contributing to promoting greater productivity and well-being, an administrative reform will help to reconcile the equation between balanced public spending, less pressure to increase taxes, and better results from public policies.

Finally, a final, equally important message was consolidated among us, analysts who participated in the event. Brazil has already approved Constitutional Amendment 19/1998 to address administrative reform 10 years after the new Federal Constitution was approved. It has never been regulated.

With the current constitutional basis, there are bills (PLs) being processed in Congress that, with an easy quorum, would achieve the same objectives, as they would already deal with this regulation.

These are projects that deal with general rules for public tenders (2,258/2022); performance evaluation in the public service (PLP 116/2017); rules for super salaries (PL 2,721/2021); rules for the right to strike (PLP 45/2022).

A PL could be presented by the federal government to unify and reduce the number of careers, and allow for greater flexibility.

We are truly faced with the opportunity of an open political space to advance the issue. If there is, in fact, the desire of the majority of society to have access to better public services, there is a simpler and faster way out than approving a new constitutional amendment, which runs the risk of being yet another one that never gets off the ground.

We hope that the agenda moves forward and adds to the list of good news for the new year.

And to the readers of Sheet and from this space, in which I am very honored to participate, a happy 2024!