Wed Apr 30, 2014 8:53pm

(Reuters) – Brazilian President Dilma Rousseff on Wednesday announced lower taxes for workers and a hike in stipends for the poor as her popularity ebbs five months before elections.

In a speech broadcast on the eve of Labor Day, Rousseff said she signed a decree to lower the income tax burden on workers and a 10 percent increase in the value of the Bolsa Familia family stipend program for millions of Brazilians.

“This will be an important indirect salary gain and more money in the pockets of workers,” Rousseff said. “I also vow to continue with policies that increase the minimum wage, which has brought so many benefits for millions of workers.”

Concerns about high inflation and a scandal surrounding Brazil’s oil company have hurt support for Rousseff, increasing the chances her rivals can force a runoff in the October 5 elections.

Although Rousseff remains the clear favorite, a poll this week showed that the election race may be tougher than initially thought for the left-leaning leader. According to the poll, 37 percent of those surveyed said they intend to vote for Rousseff, compared to 43.7 percent in February.

Poorer voters, millions of whom benefited from rapid economic growth and expanded social safety net programs under former President Luiz Inacio Lula da Silva, are the main electoral base for Rousseff’s center-left Workers’ Party.

It was not immediately clear what impact the measures could have on Brazil’s weakening fiscal accounts. The decree increases by 4.5 percent the income bands used to tax workers, meaning most workers will end up paying less income tax.