UPDATE 2-Brazil's Rousseff urges cabinet to back belt-tightening

martes 27 de enero de 2015 18:29 GYT

(Adds president's quotes, tax reform, union protests planned)

By Anthony Boadle

BRASILIA Jan 27 (Reuters) - Brazil's President Dilma Rousseff urged her cabinet on Tuesday to embrace fiscal belt-tightening and other measures aimed at restoring business confidence and growth in her second term.

Rousseff stressed the need to rein in wasteful spending and to do more with less, a change of policy that investors want to see but that has caused frictions within the ruling Workers' Party.

"We need a fiscal rebalancing to recover economic growth as soon as possible so we can bring down inflation and interest rates and, thus, guarantee jobs and incomes," she said at her first cabinet meeting since being sworn in on Jan. 1 for a new term.

She vowed to preserve social programs that have reduced poverty, but said pension and unemployment benefits will have to be trimmed.

Labor unions plan protests on Wednesday against the policy changes, a first show of opposition to the belt-tightening from within the ranks of traditional allies of her Workers' Party.

The leftist leader said the adjustment will be "gradual" and started with budget cuts for all ministries. Steps will be taken to cut red tape and encourage investment by expanding private concessions in infrastructure projects.

Taxes will be simplified to ease the burden on companies and make them more competitive to boost exports, she said.   Continuación...