On December 14TH , in a closed meeting, the Members of Brazil's National Congress awarded themselves a 90.7 per cent pay rise, this award will undermine the Countries efforts to bring public spending under control.
The leaders of the Lower House and the Senate, agreed to increase their monthly wage from R$12,847 (approx. $6,000.USD) to R$24,500 (approx. $11,100.USD). This award is binding and requires no further vote in congress. It will come into effect when the legislators return from their year-end recess on February 1, 2007. When the salary raise takes effect in February, including expenses, staff salaries and extra payments, the minimum average monthly package for members of congress will rise to R$116,254. (approx. $52,850.USD)
One in five members of congress is currently under investigation by The Federal Police or is currently being prosecuted by the Brazilian Supreme Court. This Legislature has been marred by corruption scandals since it took power in 2002.
Brazil's President Luiz Inácio Lula da Silva has said the aim of his second four-year term, which begins on January 1, 2007, will be to "unlock" Brazil's economy and produce growth of at least 5 per cent a year - double the average over the past 15 years - although he recently said this would not be achievable in 2007.
Most economists agree that the prerequisite for growth in Brazil, will be to cut current expenditure - on pensions, salaries and other running costs of government - to release capital for investment in infrastructure and other drivers of growth.
Next week, ministers and union leaders are expected to agree an increase in the national monthly minimum wage from R$350. (approx. $159.USD) to about R$367 ( approx. $167.USD) a nominal increase of 4.86 per cent, or about 1.7 per cent after you calculate for inflation.
If State and The Municipal legislators follow the Congressional pay rise, as expected, the additional annual cost to Brazilian taxpayers will be R$2,000,000,000 (approx. 910,000,000.USD)
