A budget for growth, justice, and consolidation

The Portuguese Prime Minister described the 2026 State Budget as one of growth, justice, and consolidation. "Economic growth and rising income", "social justice and solving people’s real problems", "consolidation of the financial equilibrium with less taxes, more investment, and lowering debt", he said at the opening of the discussion on the 2026 State Budget in Parliament.

Recalling that Portugal is growing more than the European Union and with solid accounts, he stressed that the Government "has a clear goal: to transform Portugal and solve people’s problems". "The promise we made to the Portuguese", to increase wages, make the country grow, and reform and transform "is being kept" he said. 

Claiming that "Portugal has full reason to be ambitious with regard to its future", Luís Montenegro noted that "we all heard the firm and repeated voice of the Portuguese people saying: let the Government do its job. And I will add to this: with all the differences in the democratic discussion, may all be part of this job for Portugal’s future."

The Prime Minister stressed that enabling the Budget "does not make the parties who do so co-liable for governance", rather "co-liable for the political stability they promised the Portuguese", and which ensues democratic normality.

In reality, "it strengthens the country’s stability, which everyone promised to preserve in the contract with the people in the elections", he said.

New doctrine

The Prime Minister indicated the "new budgetary doctrine centred on results and control of the use of public money", a new, responsible, simple and transparent way to deal with the State revenue and expenditure, which contributes to the country’s financial, economic, and social stability.

Anything "that doesn’t belong" in the Budget was removed, as the discussion on public policy has its own time and its decision "must not happen on the back of the discussion on the budget".

The new budgetary doctrine "places the budget in its place" and sets an essential stability for economic growth that creates jobs, generates wealth, pays better wages and salaries, and allows the social State to be strengthened.

Increasing income

Luís Montenegro stressed that "for the second year running, the State will not increase taxes, rather the opposite", allowing the Portuguese to "feel a growing tax relief". 

The Budget reinforces the income policy, valorisation of work, merit, and social justice, cutting income tax not just due to the increase in the tax bracket thresholds, but also the 0.3 percentage point cut on the rates for the 2nd to the 5th bracket, which will benefit more than 2.6 million households directly.

The national minimum wage will rise to 920 euros, "another step in the direction of the 1100-euro target" by the end of the term in office.

It will also retain the incentives on companies to increase all wages because "the real rise in average wages is one of the Government’s main goals", he said.

For pensioners, "we will increase all pensions", which means an added 144 million euros in the pockets of those who contributed their entire life to retire decently and "we will rise the Solidary Benefit for the Elderly by 40 euros, to a total of 670 euros". The priority is to not have any pensioner living with less than 870 euros by 2029".

For youths, the Budget maintains Youth Income Tax, exemption from property transfer tax and stamp duty, and boosts the public guarantee on mortgages "offering them the right conditions to settle in Portugal".

The Prime Minister also said that rising incomes "must be based on a greater wealth creation" generated by companies through investment, innovation, and competitiveness on the global market so they can pay better wages.

For this, corporate income tax will also be lowered to 19% and to 15% for the small and medium-sized enterprises. The Government undertook to have this tax rate at 17% by 2028.

Health

In health, "we will maintain the effort towards a structural transformation of the NHS with humility, aware of the difficulties", he noted, adding that the drop in waiting times in emergency was 16%, with a reduction of more than 30% in patients who after triage were given an orange bracelet (highly urgent) and a 29% drop in the number of days where hospital emergency services were shut down when compared to the same period in 2024.

The NHS’s response increased with more consultations and surgeries, including oncological, as well access to healthcare with the set-up of medical attendance centres, complementary attendance services, and dentistry practices in healthcare centres and open consultations, as well as the creation of the Pregnant and Suicide NHS hotlines.

The "long overdue works" at Hospital de Todos-os-Santos began and the new Algarve Hospital is being launched.

Housing

Stating that "housing is a top priority", the Prime Minister indicated that "we doubled investment and guaranteed funding beyond the RRF horizon" (which ends in 2026), adding that "there will be more than 9 billion euros invested in public housing".

The Government simplified public procurement in projects using European Funds and will offer derelict buildings for rental for the middle classes through public-private partnerships.

To foster housing for everyone, including the middle classes, "we presented a true shock to increase supply", which includes cutting VAT for building homes that are not luxurious, a cut in the autonomous income tax rate for landlords who rent, up to 2300 euros from 25% to 10%, and a rise in the ceiling on income tax deductions for tenants to 900 euros in 2026 and a thousand euros in 2027.

Immigration

In terms of immigration, "we ended the manifestations of interest that represented the doors wide open that increased four-fold the number of immigrants in a few years" Luís Montenegro stated, adding that "our goal is clear: there is no dignity without rules nor welcoming without responsibility".

The Government is "conducting a veritable reform of the entire migration system" and boosted the consular network, border security, is solving pending files, strengthening responses in integration, keeping away from national soil those who do not abide by the rules and "making sure the entry into Portugal is made legally and according to our needs".

The Government will continue to ensure an entry flow suited to the country’s real needs, as "Portugal cannot be a country whose doors are closed nor will it be a country whose doors are ajar", he said. 

Regarding safety, "another core area, we will make sure there are more officers on the ground, more prevention and trust on the streets". Investment in internal security will increase 11.3%, strengthening human resources and negotiating their careers with responsibility and value.

As for justice, "we will propose amendments to the criminal legislation to boost its swiftness and efficacy".

Growth

Luís Montenegro stressed that "the Government has an agenda to transform Portugal". "In 2026, our economic growth will be 2.6%, employment at a high and unemployment at historical minimum levels (6% in 2026)". The drops in tax burden and the budget surplus allowed a public debt reduction to around 88% of GDP, "which will be the lowest since 2009".

The Prime Minister stated that the margin for budgetary amendments is "very narrow" and "will require a high sense of responsibility for everyone". Portugal "has what it takes to continue to be a reference for stability in Europe and the world but "it has to build this with a sense of responsibility".

"The Government will be on the side of Portugal’s stability and will count on all the parties responsible who wish to be with us so we can concentrate on what really matters: solving the problems for the Portuguese people, households, and companies", he added.