"Without pension reform, the states will go bankrupt," says Marconi.
A broad pension reform, as a means of saving the states and the Union itself from financial and fiscal collapse, was advocated by Governor Marconi Perillo during a lecture he gave at the opening of the Special Panel on the State Financial Crisis held on Friday at the BNDES headquarters in Rio de Janeiro; alongside the host governor, Pezão, and the economist, Raul Velloso, Marconi began his explanations by criticizing the impositions made by the National Congress and the Union; "If we don't reform the pension system, the states will go bankrupt," he said.
Goiás 247 - A broad pension reform, as a means of saving the States and the Union itself from financial and fiscal collapse, was defended by Governor Marconi Perillo during a lecture he gave at the opening of the Special Panel on the State Financial Crisis held yesterday and today (22) at the BNDES headquarters, in Rio de Janeiro. Alongside the host governor, Pezão, and the economist, Raul Velloso, Marconi began his explanations by criticizing the impositions made by the National Congress and the Union. "If we don't reform the pension system, the States will go bankrupt," he said.
“Often, governors and mayors are accused of being incompetent, indecisive, negligent, or lacking the courage to face serious challenges,” stated Marconi. “In reality, a large part of the problems that states are experiencing today are directly linked to decisions made in the National Congress, or from initiatives of the federal government that are mandatory,” he said. “We are obligated to comply with them. We have nothing more to do from the point of view of austerity programs, spending caps. Everything that had to be done, has been done,” he affirmed.
The governor declared that the 14,25% pension contribution rate in Goiás is still insufficient to cover benefit payments. "We would need 40%, plus the state's share, if we want to achieve balance." For this reason, Marconi believes that if Brazil does not implement a pension reform that at least addresses the age issue, the states are doomed to bankruptcy. "There is no doubt about that," he reaffirmed. "Without reform, all the efforts we make towards modern, efficient, austere, and responsible management will be in vain if we don't have something that truly resolves the pension issue in Brazil," he concluded.
Another aspect presented by the governor concerns the relationship between the number of active and inactive employees in the state administration. “In Goiás, we've had a decrease in the number of active employees, less than 17%, but an explosion in the number of inactive employees, more than 58%. Ten years ago, we had a pension deficit of R$ 400 million. This year we reached R$ 1,96 billion. Under normal conditions, we would have a deficit of less than R$ 1 billion this year,” stated the governor. “The pension deficit alone is almost double that. If it weren't for the pension problem, we would have more than R$ 1 billion per year for investments,” he affirmed.
"This, as you can see, is a very serious problem we are currently facing. The most serious in the country. Either we reform the pension system or the states will go bankrupt. Brazil has no way out," stated Marconi. Continuing his analysis of the issue, the governor warned that if nothing is done, "in two years there will be no magic solution and no governor who can govern with a deficit like this." "The states will not survive. It is no longer possible for some people to retire at age 45 with a salary exceeding R$ 30. We have 67% of our retirees, that is, 64 of the total, receiving more than R$ 5. The rest receive above that and even more than R$ 30. No country or state can withstand this," he said.
Economy of Goiás
The governor also reported that Goiás, in the last quarter, registered growth of more than 4,5 times the national GDP. “In the accumulated semester, we had growth greater than Brazil's by 1%. But in this second quarter, we grew 4,6 times more than Brazil in GDP. This is based on the 22% jump in agribusiness,” he stated. “Our trade balance has already reached 44 consecutive months of surplus. In August alone, the surplus was 344 million dollars,” said the governor.
Marconi also cited employment figures. "For the eighth consecutive month we had a positive balance in employment. We only lost to the states of São Paulo and Minas Gerais, the two most populous in Brazil," he added. The governor said he had done his homework by highlighting that he had reduced the state's structure to ten secretariats; approved the spending cap amendment (which means a limit on the variation of inflation or net current revenue, whichever is lower); and ensured that primary revenues exceeded expenses.
Income and expenses
“This year, we already have 105% of our revenue committed to four absolutely necessary basic expenses: payroll, debt, social security, and budget allocations. We will have to secure an additional 5% in extraordinary revenue if we want to end the year with a balanced financial situation. This is despite all the effort we have made,” he said.
Marconi presented the investment figures for the Goiás na Frente Program for 2017 and 2018, which foresees the execution of works and actions totaling R$ 9 billion. "We don't have a single cent from the Treasury for investment. Everything we've achieved has been through other sources, other variables," he stated.
The governor also spoke about the "More Competitive and Innovative Goiás" initiative. "We govern based on evidence: where we are, our goals, where we want to go. We have priority challenges such as education, health, security, etc., and all the main indicators of competitiveness. We haven't yet reached the levels of competitiveness we want because the data released now is based on figures from 2012 to 2015. In this latest competitiveness ranking, only one item is from 2016. But we are certain that next year we will make a great leap in competitiveness in the national ranking."