Portuguese ministers

State Budget debate: what opposition parties are pushing for

Rectifying budget “could be presented” after March elections

In many ways, the settling of Portugal’s State Budget for 2024 is ‘academic’: elections in March will see a new government taking office, and it is widely believed that a ‘Rectifying Budget’ could then be presented, depending on which party (or coalition of parties) wins through.

If PS Socialists manage to convince the electorate that they should be voted back, the likelihood of budgetary changes will be slim. But any other combination of political power is almost certain to see alterations pushed through, thus here is a round-up of what the various parties would prefer:

PSD – the largest party in opposition, with 77 MPs

PSD social democrats are proposing a reduction in personal income tax up to the eighth scale (ie beyond the current PS proposal), a maximum rate of 15% for young people’s personal income tax, full restoration of teachers’ service time (something PS Socialists have doggedly refused), phased in over five years, and the elimination of the extraordinary contribution for alojamento local (short term holiday lets).

Among other proposals, the PSD wants the government to set up a working group within 30 days to assess non-habitual resident regime, create a tax incentive mechanism for savings of up to €100,000 euros, reduce IRC (business’ tax) to 19% and bring in tax exemptions for productivity bonuses.

CHEGA – the country’s 3rd political force, 12 MPs

CHEGA wants an IMI rates exemption for own permanent properties under a value of €350,000, and an increase in the minimum wage to €900. The party is also pushing for a reduction in IVA (value added tax) charged on petrol and diesel to 13%, for banks to pay a 40% tax on profits, with the proceeds channelled by the State into reducing families’ mortgage payments.

Iniciativa Liberal, 8 MPs

Iniciativa Liberal (IL) wants to create a new, lighter system of income tax: with 0% payable for up to €7,400 euros of taxable income, a rate of 15% in the second bracket, taking taxable income up to €32,450, and thereafter a third bracket with a rate of 44%. IL also wants to see an end to the NHR/ Regressar and young IRS programmes, as well as the return of the revenue from the privatisation of TAP to the country’s taxpayers.

PCP communists, 6 MPs

The country’s communists are focused on changes for public transports, creches and rents. In the first, they are seeking to reduce the costs of ‘the social pass’ to €20 and making public transports free for all young people up to the age of 23 and for the over-65s. 

The party also wants medicines to be free for the over-65s and the chronically ill, as well as advocating an end to tolls on formally-SCUT highways (which began being tolled during the troika years).

Among other measures, the PCP wants a 0.43% limit on rent rises and the creation of a public network of crèches, free access for young people up to the age of 25 to all cultural facilities and activities organised by government and increased investment in CP (the country’s train network) and Transtejo/Soflusa – which provides river transport between Lisbon and the south bank.

PCP communists are the party that have tabled the highest number of ‘proposals to change’ the 2024 State budget.

Bloco de Esquerda, 5 MPs

Bloco de Esquerda (BE) wants a 15% pay rise in the civil service by 2024, or €140 whenever that percentage is lower than this absolute value; a limit on the updating of rents and the renegotiation by banks of spreads and other conditions associated with variable interest rate mortgages, so that the DSTI (the pressure on households) does not exceed the maximum value of 50% of income.

Among other measures, the party wants to ensure there are no further ‘closure rotations’ in health service emergency departments, that workers in the SNS health service are entitled to risk and hardship status; free public transport for young people, students and senior citizens.

PAN, 1 MP

PAN wants to see an end to seizures of family homes (by banks, on non-payment of rents/ mortgages), a reduction in IVA on animal feed and medical-veterinary services, and a pilot project to study the possibility of granting a licence to women who suffer from severe and disabling pain during their menstrual periods.

The party also wants to ensure that hydrogen and lithium projects are suspended; free travel for the under 23s travel on public transport; the updating of tax brackets to take inflation into account and a 1% reduction in IRS (personal income tax) for the 6th and 7th tax brackets.

LIVRE, 1 MP

Livre has proposed a programme for the State to contribute up to 30% of the market value of a property on down payments for the purchase of people’s first home, in the form of an equity loan, as well as the creation of an Emergency Fund for people who have a salary but no roof over their heads, financed through a 15% surcharge on the Municipal Property Transfer Tax (IMT).

The party is also pushing for an extension of the ‘3 C’ Programme – Home, Comfort and Climate; the creation of a public hydrogen agency or company and the extension of the national rail pass to urban, inter-regional and intercity trains, with a maximum monthly value of €49.

There are well over 1,900 proposals involved in the upcoming debate which will run for almost 40 hours before the final ‘global vote’ next Wednesday.

PS Socialists have come up with their own ‘counter proposals’ (which are bound to be approved as the party is in a majority), all of which seek to reverse or attenuate the most controversial measures of this government’s final budget.

Source material: SIC Notícias