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Meirelles: "We need to assess the ability of society to pay Social Security"

Reform of Social Security

Minister of Finance participates in Forum organized by the State to discuss the proposal of reform made by the government

Finance Minister Henrique Meirelles said that it is necessary to assess the ability of the Brazilian population to pay Social Security.

According to him, the growth of spending between 1991 and 2015 was mainly driven by social security expenditures. "The trajectory is growing. In all mandates, presidents ended up with higher expenses than they started. This clearly shows the unsustainability of Brazilian public accounts, "he said.

Meirelles spoke at the Sao Paulo State Statistical Forum on Pension Reform on Thursday (09). He opened the event and reported how much public spending has grown in recent years. The minister argued that no one questions the importance of Social Security, but argued that the system needs to be sustainable so as not to become a burden on society.

"The Brazilian Pension Plan has a positive point: it is generous. No one questions that this is something positive, that is something that should be pursued, "he said. "On the other hand, that's not the point. Who pays this is Brazilian society, and we have to evaluate the ability of Brazilian society to pay, "he argued.

Weight of Social Security in the Budget

Meirelles explained that Social Security, in the last decades, has gained a lot of space in the public Budget. "It is clear that it is an unsustainable trajectory. If we compare primary central government expenditure to GDP, we will see that it went from 10.8 percent of GDP in 1991 to about 19 percent of GDP today. It is a growing and uninterrupted trajectory, "he observed.

Most of this advance in spending, Meirelles noted, was pulled by Social Security. "In summary, the main focus of the evolution of public spending in Brazil over these 25 years is basically concentrated, in large part, on Social Security," he explained.

Source: Portal Brazil, with information from the Ministry of Finance and Estadão