Budget "sets a shift in Portugal’s political direction"

"The people wouldn’t understand the Government having to govern with a budget other than their own. This budget, by reflecting a spirit of compromise, is not our initial proposal, it sets a shift in Portugal’s political direction", claimed Prime Minister Luís Montenegro while opening the discussion on the draft State Budget for 2025 in Parliament.

In their negotiation with the largest opposition party, the Government already takes on "a compromise up to the limit of what is reasonable", so to disfigure the budget in Parliamentary discussions would be "an offense against the people’s will" as shown in the elections at the start of the year.

This budget, he said, was the outcome of a long process "with the most transparent exchange with Parliament that we can remember and a unique availability to negotiate", which is "shown by the several proposals put forward by political parties that were accepted, many of them with relevant impact on the budget, focusing on lowering tolls and expanding VAT on electricity", approved by the opposition during this year.

A different Budget

This Budget is "different to all the rest" and shows "there is an alternative that ensures balanced accounts, lower taxes, capacity to reform, investment in public services, and improving living conditions for the Portuguese".

"The Government was humble enough to give in" during the budget negotiations "to protect the people, institutions, and companies". "It is now up to Parliament to show they believe in Portugal and the Portuguese", he said.

The people’s will

The draft State Budget for 2025 "accommodated to the main terms presented by the largest opposition party, namely youth income tax and corporate income tax." "As the Portuguese understood, the proposal we put forward to the largest opposition party and which we reflected in this State Budget is a compromise up to the limit of what is reasonable. From that point onwards, it would misrepresent the Government’s Programme".

To go beyond this compromise "whether in the general or specialist discussions, whether the budgetary margin or the governing political direction, would disfigure the Budget and would be an offense to the political will shown by the Portuguese people in the last elections", he said.

Governing for the people

"The person is the measure and the end of all human activity" and "politics must be at the service of a person’s full realisation", he said, quoting Sá Carneiro and claiming these phrases "are the Government’s guidelines for this draft State Budget for 2025. A Budget to recover, reform, and relaunch Portugal responsibly".

Luís Montenegro claimed that when the Government took office in April "the State was weakened in its capacity to endure the social contract with the Portuguese" because "while the Portuguese people were drowning in taxes, the State was fattening up and public services withering away." As such, "what were the sound accounts for?".

"The biggest difference" with the current Government is "there is a life and targets beyond a budget surplus2. "This Government’s focus is not to last, it’s to do".

And he quoted Father Padre António Vieira: "we are what we do, on the days we do it we truly exist, on the others, we simply last", adding that the Government’s goal "is to really do, it’s to solve people’s problems".

Boosting services

The Government guides its action through "service to the people without dogmas, intransigence, or ideological bias" and invests greatly in "boosting the State and rising wages for civil servants", as "this is the only way we can retain, attract, and motivate people to offer a public service to the Portuguese".

At the same time, this is "also a budget that invests in companies all of them, from the micro-sized enterprises to the major corporations", for a "more solid and healthier" economic growth based on productivity.

"This growth comes from the efforts made by Portuguese companies and those who work and invest in these companies. This growth is not in a decree, it is stimulated, and the efforts are not ignored, they are acknowledged", he said.

Pensions and taxes

The Prime Minister also listed some of the measures outlined or continued in the Budget for 2025, among which a "new additional benefit from 100 to 200 euros for pensions up to 1 527 euros", similar to that paid in October, if the budgetary execution allows it, updating the solidary benefit for the elderly, or updating all pensions "according to the rules in force".

Luís Montenegro also stated that the State Budget for "will not raise a single tax", while boosting wages and pensions with "lowering personal income and corporate income taxes" 

"Lowering personal income taxes on top of that set by the Government in 2024, expressed in the update made to the tax brackets at double the inflation rate, exemption of taxes and contributions for productivity bonuses, and lowering by 50% the autonomous personal income taxing on additional work", as well as "reducing even more youth personal income tax, now applied to all youths".