Main aim of State Budget: “to shelter country from external turmoil”

This position was conveyed at a meeting with PS MPs after the government presented its proposal for the 2024 State Budget, in a speech lasting around 25 minutes.

“We know very well what happens when debts start to rise and what pressures countries are then under. It’s essential to put ourselves in a safe harbour in the face of external disturbances,” he said – alluding to Portugal’s goal of coming close to or overtaking Belgium next year in terms of the weight of debt in Gross Domestic Product.

The current external situation was also referred to by the governing Socialist Party (PS) secretary-general right at the beginning of his speech, when he tried to explain the main strategic lines of the proposed State Budget.

With finance minister Fernando Medina beside him, the leader of the executive pointed out that some of Europe’s leading economies will either be in recession or close to it next year, which will certainly create obstacles in terms of external demand and investment.

Portugal must therefore “maintain the current high levels of employment, which have been the key to the success of the Portuguese economy, and economic growth”.

To this end, in view of the foreseeable external situation next year, and in order to maintain employment levels and some growth, “the draft State Budget has as its pillars the strengthening of income and investment,” especially public investment, he said.

The planned reduction in personal income tax would benefit “all households”, he stressed, although it will have a greater impact on the first five tax bands.

António Costa also used the unstable external climate to introduce the subject of the reinforcements to social benefits in the budget.

“Some of these exceptional measures will now be incorporated as definitive, structural measures in our social benefits”, he said. “This is the case with the extra support for children up to the 4th tax band, in which there is a very significant increase in the family allowance, thus contributing to one of the major objectives we have, which is the eradication of child poverty.”

He then mentioned the planned increase in the value of the solidarity supplement for the elderly.

“We had set ourselves a target of putting the solidarity supplement for the elderly above the poverty line by 2026, so that no elderly person has an income below the poverty line. We managed to bring this goal forward to 2024 and next year the solidarity supplement for the elderly will be above the poverty line, lifting the elderly out of poverty and social exclusion,” he said.

It is not a speech that has swayed opposition parties, but the PM is supported by his own party, which has an absolute majority and thus will have no difficulties voting this new State Budget through.

Source material: LUSA