Archive article from The Socialist Issue 309
"Stop The Reform Or We Will Stop The Country"
TRADE UNIONISTS in France and Austria have fought major battles this year to stop their right-wing governments attacking workers' pension rights.
Cutting welfare provision is an objective of capitalism internationally, but as the report from Marcus Kollbrunner in Brazil shows, workers there too are fighting back.
ON 8 JULY an estimated 350,000 civil servants in Brazil went on an indefinite strike against the pension 'reforms' proposed by the Lula government.
The reforms will mean lower pensions for civil servants; increased pension contributions; make the period of contributions payment longer; increase the retirement age and open up private pension funds.
The strike, the first against the government led by president Luis Inácio "Lula" da Silva from the Workers' Party (PT), was called by eleven trade unions that organise civil servants employed by the federal state. It involved around 40% of the workers on the first day of action.
For many years the PT blocked efforts by the previous government of president Cardoso to attack pensions. Cardoso managed to implement cuts in pensions in his Amendment 20 in 1998 and many supporters of the PT expected that a Lula government would reverse these attacks. Instead Lula is now implementing all the attacks that Cardoso did not manage to carry out!
Government tries to divide workers
The government is trying to divide workers by saying that the civil servants are "privileged" compared to workers in the private sector. Lula has demagogically stated, "sugar cane cutters have no pension rights".
It is true the pensions in the private sector are very low or even non-existent. 65% of workers retired from the private sector get only the meagre level of minimum wage, 240 reais (85 US dollars). 40 million people from a total workforce of 70 million do not have any pension rights at all. What should be done is to give them decent pensions, not attack the pension of civil servants.
The attack on pensions is consistent with the policies of the Lula government of sticking to International Monetary Fund (IMF) agreements and 'calming' the financial markets with austerity measures.
The usual argument used by governments for attacking pensions around the world is that the 'generous' pensions cannot be sustained. In Brazil it is claimed that the public pensions run at a big deficit. But the social security system, including other social benefits like sick pay, has a surplus that now is used to pay debt service to the banks.
The real villains are the big companies and banks that owe a total of 180 billion reais (65 billion US dollars) to the social security system. Eight of the biggest debtors are in the Council of Social and Economic Development that Lula initiated as a vehicle for social pacts, and which discusses proposals like the 'new' pension system!
Lula presented the pension changes on 30 April, with the support of the 27 state governors that will adjust their pensions systems to the federal state. That has already been felt by the civil servants in São Paulo, where the governor, Alckmin, has increased the contribution from workers to the pensions from 6% to 11% of their wages - in practice it means lowering wages by 5%.
United struggle needed
The main beneficiaries of Lula's reforms are the financial sector and banks that will get lots of new capital to their funds. The new pension will not end the real privileges in society. High court judges and high-ranking military personnel will continue to have big pensions - and, of course, so will the politicians.
The government is trying to rush through the new system and hopes to have a vote by August, before the opposition grows too big. On 11 June 40,000 marched in the capital Brasilia against the proposal. They demanded: "Stop the reform or we will stop the country". Ministers that tried to defend the proposal were shouted down. Even the newly elected leader of CUT (Brazilian trade union congress) was not able to speak. The majority of the CUT leadership is in favour of the pension changes; they only propose some amendments.
The CWI section in Brazil, Socialismo Revolucionario, calls for a total rejection of the pension 'reform'.
The PT left must vote no to the proposal and build for a united struggle of the public and private sector workers to fight for a decent pension for all workers. To win that the PT must break with the IMF and stop paying the debt, but also nationalise the banks, financial institutions and big companies.
The full version of this article is on the CWI website, www.worldsocialist-cwi.org