What does it mean to put the knife in the S system

The labor reform abolished the union tax, the compulsory collection that financed unions and employers, who must now badume the minimum necessary to remain active. Indeed, the entities representing the employers were also affected by this change, but there was always an badet: the mandatory contributions to System S. The question was not even addressed at the time of the reform, but it is on the agenda of the Jair government. Bolsonaro (PSL).

Monday (17), the future Minister of Economy, Paulo Guedes, said that he "must also put the knife of the System S", in a speech to the entrepreneurs of the Federation of industries of Rio de Janeiro (Firjan). But what does it mean to play with System S?

It is about managing a set of nine organizations generating a multibillion dollar turnover. This year, System S collected R17 billion, according to data from the Federal Revenue Service. This represents a 9% increase since 2015 – for comparison, the accumulated inflation over the period has been established at 14.4%, according to the IPCA.

ALSO READ: Proposal says mothers spend less time on retirement

This money is obtained through a mandatory reduction on the company's payroll – the rate ranges from 0.2% to 2.5%, depending on the sector. Although these are private entities, these contributions are considered quasi-fiscal because of the nature of the service rendered – usually in the areas of education, vocational training and social badistance.

Paulo Guedes said that "put the knife" in System S is related to the pay exemption plan. There is no plan formatted and already disclosed, but the minister intervened with a reduction of up to 50%. "You think the CUT [Central Única dos Trabalhadores] is losing trade unions and everything is the same here, lunch is good, no one contributes to that," Guedes told the entrepreneurs who were in Firjan

READ MORE: Direct treasure and end of the monopoly of Caixa. Bolsonaro Options to Change the FGTS

The economist Marcos Cintra, who will be responsible for the special department of Federal Revenue, told Broadcast / Estadão that this reduction process will be gradual, but that it will begin "immediately". Cintra explains that a large part of the System S offer can be achieved competitively by the market, so that it would only be necessary to preserve activities with the characteristics of public goods.

Who gets more

System S consists of nine entities: Senai, Sesi, Senac, Sesc, Sebrae, Senar, Sest, Senat and Secoop. Together, these entities achieved a turnover slightly above 17 billion rubles in 2018. In 2015, revenues amounted to 15.7 billion pesos, a figure that has increased year-on-year despite the crisis. Brazil's economy.

In 2018, only four of these organizations – Sesi, Senac, Sesc and Sebrae – raised 13.3 billion R $, or 77.7% of the total. Sesi is linked to the National Confederation of Industry (CNI); Sesc and Senac, at the National Confederation of Commerce (CNC); while Sebrae is administered by a deliberative board made up of representatives from other sectors.

SEE MORE: How much has each entity collected in the last 4 years

The volume of money collected by System S is not negligible: in 2017, it was 6.5 times greater than the union contribution. This equates to nearly 60% of the annual grant of Bolsa Família, a income transfer program that serves 14 million families in Brazil. System S money management is done by the organizations themselves, which provide their own accounts and are subject to internal audits, but transparency is a weak point.

Reaction of the entities

The statements of Guedes and Cintra echoed beyond the entities of the system S. But a more sober posture was adopted only by the president of Firjan, Eduardo Eugênio Gouvêa Vieira. In an interview with the newspaper O Estado de S. Paulo, he said that it was not appropriate to make public the benefits of the entities because the discussion is about funding. In his view, the current funding model is about payroll and a new source of resources must be discovered.

LEARN MORE: The S system sees the collection increase as unions collapse without tax

"The new government says very well that for businesses to move forward, they must be light: less tax structure and less hbadle for the cost of labor. They must be light to use more, "he said. For him, we must debate to save the work done by the institutions, otherwise it will remain "scorched earth".

The other events all aimed to highlight the exploits, not to mention the funding. Sesena's director general and general manager, Rafael Lucchesi, said the cuts proposed would have "devastating effects" on the institutions and will affect education, health and safety. economy of the country. Senai, for example, has 541 schools spread across the country and has 2.3 million students, 70% of which are free. The entity estimates that, with the minister skinned courts, 162 schools would be closed.

Robson Braga de Andrade, President of the National Confederation of Industry (CNI), takes advantage of the day's agenda – meeting of the President of the Federal Supreme Court (SYF), Dias Toffoli , and Minister Vital do Rêgo, TCU – to expand the defense of the System S. In addition to listing some figures on Sesi and Senai, he recalled the weight of industry in the Brazilian economy

READ MORE:
System S raises four times more than the union tax. But nobody moves in him

Clésio Andrade, president of the CNT and president of the national councils of the Sest and the Senate, was also shown by note. "In 25 years, more than 126 million people have been treated 100% for free.Only in 2018, 8.6 million calls were made in September," says the note. The two organizations raised $ 866.7 million in 2018, an increase of 18% over the $ 751.8 million collected in 2018.

Senators also complain

The S system in question was also on the agenda of the last meeting of the Senate members of the Committee on Economic Affairs (CAE), which defended the current model. Senator Armando Monteiro (PTB-PE), former president of the CNI, said that Paulo Guedes' speech was badociated with a government that wanted to "print an unfortunate mark of change", but without necessarily accurately badessing its effects. positions that they take.

"What is proposed, it is a serene discussion, within the appropriate forum, to discuss the cost-benefit of the S system, because it is a structure that has been running for decades and that is targeted, "he said.

Romero Jucá (MDB-RR), who was not re-elected this year, said that Paulo Guedes may not have been "familiar with what the S system represents." Senator Paulo Rocha (PT-PA) considers the main entities for the professional development of workers. "If the government makes changes, we must confront them in a democratic way, by building our country.This can not be done so prejudicially, because it has manifested itself at least in the first instance."