Brazil’s cash-strapped government is drawing up a voluntary redundancy plan for federal civil servants aimed at reducing its bloated payroll and saving about 1 billion reais ($318 million) a year, the Planning Ministry said on Monday.
It will also offer public employees a shorter workday in the latest effort to cut payroll costs and reduce a gaping budget deficit that cost Brazil its investment grade credit rating.
The ministry said in a statement that the plan would be announced this week.
The government’s income and spending estimates published last week show a payroll bill for this year of 284.5 billion reais. That marked the second largest outlay after social security benefits, which total an estimated 559.8 billion reais.
A two-year recession has reduced tax revenues and forced the government to freeze spending as it seeks to meet a 139 billion-real budget deficit target for 2017.
Political turbulence stirred by corruption charges against President Michel Temer has delayed approval in Congress of an unpopular overhaul of Brazil’s generous pension system that is the main cause of the budget deficit.
($1 = 3.1468 reais)
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