Brasília, 7/18/2003 (Agência Brasil - ABr) - Minister of Finance, Antonio Palocci, says that in his opinion the report on social security reform by deputy José Pimentel (PT/CE) does not affect the heart of the government's initial proposal.

Palocci admitted that at some moments in the debate on the reform bill there was concern with the integrity of some of the essential points. But, he added, the principles of equity and justice remain intact in the report and that is what the government wants.

"With regard to active civil servants, the fiscal effect of the adjustments is basically neutral," said the minister. "What you cannot change is the essential character of the reform, its backbone, that is, the idea of equity." However, Palocci went on to declare that the changes made were "very close to the limit of what could be done without affecting the integrity of the bill." He concluded by saying that the government remains on the alert because in the future attempts could be made to compromise the fiscal aspects of the bill and that could not be allowed to occur.

Polocci pointed out that full-pay retirement is just an option, and that it is an option with rigid eligibility requirements.

With regard to the tax reform bill, Palocci declared that he does not expect smooth sailing, but rather some more heated discussions. "What I would like everyone to do is set aside personal interests and think of ways to balance Brazil's budget; get spénding in line with revenue," said the minister, as he called for an open dialogue with congress and the business sector.

According to Palocci, it is possible to make changes in the tax reform bill, but its essence must also be preserved. That, explained the minister, means no tax increases. And it must be just with all levels of government and the people. "There is no way we can permit those ideas to be tossed out of the bill," concluded the minister. (AB)