Brazil's government plans to cut the country's labour costs to boost productivity and growth, Guido Mantega, finance minister, told the Financial Times.
"We have the chance to turn the global economic crisis into an opportunity," Mr Mantega said.
"We want to make a qualitative leap in productivity and put Brazil at the forefront of global growth. These measures will make it possible for a range of industries to compete on world markets."
The measures, expected to be announced in coming weeks, include abolishing the 25.5 per cent of each employee's gross salary that employers must pay into a range of welfare funds.
The government has launched a slew of initiatives to counteract the effects of the global economic crisis since last year. It released R$100bn ($51bn, €36bn, £31bn) from reserve requirements - the share of deposits that banks must park at the central bank - to provide funding to the sector during the first stages of the credit crisis. It also made short-term cuts in sales taxes on vehicles and big-ticket household electrical goods, which quickly returned sales to pre-crisis levels.
Many of those tax cuts, which had been expected to expire on June 30, were last week extended for months. Selected capital goods were granted new exemptions.
"We have used some short-term measures to provide an imputus during the crisis," Mr Mantega said. "Now we are working on measures for the post-crisis period to take advantages of the opportunities offered to Brazil. For that, industry needs lower costs."
Mr Mantega said the cuts in employer contributions would not mean loss of benefits to workers. "We will cover the reductions with other measures," he said.
Financial Times - 08 Jul 2009
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