PM promises “historic” pension increases in 2023

… and higher public sector wages

PM António Costa has been in his element today, speaking at a conference in Lisbon organised by CNN.

The upsides of his intervention were the promises regarding wage increases and pensions.

They are both coming, in 2023 – to be aligned with inflation and growth in GDP.

In the case of pensions, the increase will be “historic”, he said, due to a formula enshrined in law. For example, given May’s inflation level of 8% and estimated GDP this year of 4.9%, pensions could end up being increased by 8%, he explained. It “would be” a “substantial increase in permanent public expenditure”. Could it be sustainable? That question appears not to have been asked, or addressed. 

As to increases in public sector wages, he said these would have to be negotiated with the unions.

The CNN conference, being held at Culturgest in Lisbon, has generated a lot of soundbites today (see briefly section), and to a certain extent has deflected press attention from the crisis in the health service.

Mr Costa piqued further interest by saying there would be measures in the “next few weeks” to control inflation “without the necessity to alter the State Budget, only promulgated by President Marcelo last Friday.

Picking up on the grey areas of his optimism, Expresso’s reporter explains the PM managed “not to say whether there would be any recovery of purchasing power with the increase in mind for 2023”.

He referred to the 0.9% increase in public sector wages as having been calculated on the basis of zero inflation in 2020 – and admitted to having been “surprised” by the criticism heaped on him following his comments to private sector employers, exhorting them to raise wages by 20%.

While critics referred to the ‘enormous tax burdens’ on the private sector, Mr Costa said wages in the private sector have been increasing by an average of 22%-23% over the last six year, so he cannot see what was wrong with what he said… Many would query that 22%-23%, but they weren’t at today’s conference to do so.

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