| BRASILIA, March 7
BRASILIA, March 7 Constrained by a spending cap
enacted by his own administration, President Michel Temer's
government is brainstorming to cut costs and squeeze more from a
leaner federal budget.
Tens of thousands of civil servants will have to take
regular taxis to get around Brasilia, the capital, because
fleets of chauffeur-driven government cars will be eliminated. A
centralized contract for power at government buildings will
reduce the electricity bill by 20 percent.
Since Temer, a conservative, took over for impeached leftist
Dilma Rousseff last year, his government pushed through a
spending cap that for the next two decades limits expenditure
increases to the rate of inflation. It has laid off more than
4,000 government employees and reduced the number of ministries
from 36 to 28.
The belt-tightening was a matter of necessity as Brazil is
grappling with its worst-ever recession and a fiscal crisis
brought on by soaring expenses and plummeting tax revenues. A
ballooning budget deficit has undermined business confidence and
in 2015 cost Latin America's biggest economy its investment
grade credit rating.
"If we don't balance our accounts it will become difficult
to pay for basic health and education services," Temer warned
advisers during a meeting broadcast by government television on
Tuesday, urging them to rethink public spending.
To get the job done, Temer has appointed cost-saving task
forces, whose leaders say that most opportunities lie in
revamping procurement for 120 federal agencies.
"We have to buy more with less," said Marcelo Pagotti, the
planning ministry's secretary for information technology. "Money
is limited and needs are always growing."
In addition to slashing a government power bill of 2.2
billion reais ($707 million), officials are also rethinking
purchasing of everything from software to pharmaceuticals for
public clinics. The health ministry says it has saved 1.9
billion reais in seven months with new contracts for medicines.
"The key is buying in bulk to get wholesale prices," said
Pagotti, who recently negotiated a 39 percent price reduction on
110,000 computers and monitors. A planned contract with
Microsoft for shared technology across various
ministries is expected to reduce software costs by 60 percent,
Government officials say they can also save billions of
reais by digitizing public services, thereby reducing costly and
time-consuming lines and bureaucracy. In the age of the smart
phone and biometric identity checks most public services in
Brazil remain frustrating, lengthy ordeals involving multiple
documents and procedures.
The planning ministry on Friday called for bids from
companies to provide cloud services for data storage by all
government agencies. The administration is moving to digitize
public services through a single portal, hoping to simplify
"The migration to a digital platform will bring immense
savings for the government, as well as for the public in
general," said Gleisson Rubin, the planning ministry's
The platform will unify access to existing databases, from
the federal tax department to the elections authority to the
passport office. That will simplify verification of citizen
data, Rubin said.
By eliminating the need for physical presence in government
offices, online services can cut the cost of attending to each
person by 95 percent, he said.
$1 = 3.11 Brazilian reais.
(Reporting by Anthony Boadle; Editing by Cynthia Osterman)