28 November 2018

A fond farewell present to Brazilian judges

Judges benefit from political spat as Brazil's outgoing president gives significant pay rise to judges in snub to successor.

Departing president of Brazil Michel Temer (pictured) has signed into law a 16 percent pay rise for supreme court justices, ignoring a request from the President-elect Jair Bolsonaro to veto the bill.

Huge impact

Brazil’s Senate passed the 16-percent pay raise for supreme court justices, which increases judicial salaries from R$33,700 to R$39,200 (US$10,500) a month, which is roughly 40 times the country’s minimum wage of R$954 (approximately US$255). The lower chamber had passed the bill in 2016 and it had been pending in the Senate until now with 41 senators voting in favor of and 16 against it. The senators also passed a bill to increase the wage of the federal attorney general. Congressional committees, both from the Senate and the Chamber of Deputies, estimate the pay raise could cause a huge R$4-billion (nearly US$1-billion) impact on public expenditure, as it changes the cap for all civil servants’ salaries which Mr Bolsonaro wanted to avoid. He will now inherit a large deficit when he takes office on January 1, 2019. He had stated earlier this month that now was ‘not the moment’ to approve public sector pay increases. The top court salaries serve as a benchmark for other public sector pay and the new pay rise will add an estimated 4 billion reais ($1 billion) to the deficit that Mr Bolsonaro and his economic team had promised to balance in one year.

Booby-trap

The economic team, which is led by University of Chicago-trained economist Paulo Guedes, plans to make a new proposal for overhauling the costly pension system. The system is one of the main causes of the deficit that is driving up the country’s public debt. President Temer has failed to get pension reform through Congress, and thanks to his generosity to the country’s judges seems to have booby-trapped the task difficult for his successor.