Key wage ruling rejected by Brazil

Press, 21 October 1983, Page 6

Key wage ruling rejected by Brazil

NZPA-Reuter Brasilia The Brazilian Parliament yesterday rejected a crucial wage restraint law hours after President Joao Figueiredo had imposed temporary emergency measures to prevent demonstrators from putting undue pressure on the legislators.

The controversial law would have cut wage increases to 80 per cent of the country’s triple-digit inflation.

The military-led Government and commercial bankers considered the wage-cut measure, or some equivalent law, central to the country’s efforts to finance its estimated SUS9O billion foreign debt, the largest in the developing world.

Hundreds of opponents of the measure had converged on Parliament to support opposition parties seeking to defeat it. A presidential spokesman said that the 60-day emergency measures covering the area of the Federal capital had been imposed, after a request by the head of Parliament to ensure the security and unhampered functioning of Congress.

The 479-member lower house first voted down a law cutting social benefits for public workers, 260 to three with the rest abstaining, before rejecting the wages law. The head of Parliament, Senator Moacyr Dalia, ruled that the measure had been

defeated when the leaders of the four opposition parties said their members wouuld vote against it.

Brazilian Ministers and foreign bankers had said approval of the legislation or some equivalent, to cut public spending and limit inflation — running at nearly 175 per cent — was essential for Brazil to meet International Monetary Fund targets to gain renewed financing for its huge debt.

Senior opposition politicians said that the Government had already prepared an alternative decree which would be published in the official gazette: Under the Brazilian system it becomes law immediately and Parliament has about three months to approve or reject it.

The politicians said the new law would meet some of the objections of the Government and opposition parties by allowing poorer wage earners to obtain increases matching inflation while limiting increases for the better off, holding down rents and adding some taxes.

A Presidential spokesman, Carlos Attilo, said the emergency measures imposed on Brazilia included suspension of trade union and freedom of assembly rights and gave security forces power to search private houses and detain suspects.