“Where does this money come from?”: taxes, Social Security and the power of unions

“Where does this money come from?”: taxes, Social Security and the power of unions

Antônio Cotrim / LUSA

“Where does this money come from?”: taxes, Social Security and the power of unions

The Prime Minister, Luís Montenegro

Biweekly debate also marked by the profits from the energy crisis, the labor package or the (im)balance of public finances.

This Wednesday was the day of debate fortnightly with the Prime Minister. And the crisis in the energy sector was a hot topic, as expected.

The president of IL accused Luís Montenegro of profit with the energy crisis and not telling the truth about raising taxes.

In the speech that opened the debate, Mariana Leitão said she wanted dismantle “tax by tax” the guarantee left by the Prime Minister, Luís Montenegro, that no taxes in Portugal were raised in the State budgets presented by his executives.

The liberal leader started with IVA, stating that the collection of this tax, in 2025, rose 10% compared to 2024 and followed the same logic for the collection of the fuel tax (ISP), do IMT and the IRS, still criticizing the rise in the tax value of properties.

“O State will collect more taxes than last year. If no taxes have risen, if the country is not growing, Where does this money come from?“, he asked, after stating that “the government can say that it didn’t raise taxes, but people in the middle of the month are counting the money they have and the State collects more and more”.

In his reply, the Prime Minister reiterated that there was no objective increase in any tax rate and argued that the increase in revenue presented by Mariana Leitão “corresponds to an increase in economic activity”.

Then, the IL leader accused Montenegro of speaking “in an almost disrespectful way” about the increase in revenue, by making this a “great political victory” and concluded: “It wasn’t the rates that went up. It was the weight of the State about each person’s life. And that, Mr Prime Minister, the polygraph does not absolve”.

Balance

Still in this sequence, the Prime Minister defended balance and reasonableness in responding to the rise in the cost of living, so that the country does not return to “the imbalance of public finances in exchange for solutions that are apparently miraculous”.

Luís Montenegro acknowledged that “it is true that Portuguese men and women today have a higher cost of living”, but added that this is why measures are being taken, but with balance.

“That is why with balance, with reasonableness, we are adopting measures so that the impact is mitigated, so that families can face these challenging times that are before us, but, I repeat, with balance”, he highlighted.

Luís Montenegro told the liberal leader that he is convinced that she does not want to “go back to the old days before 2011 and the imbalance of public finances in exchange for solutions that are apparently miraculous, but which bring a bill that taxpayers, people, families and companies then pay.”

The Prime Minister also highlighted, at the beginning of his response, that the rise in fuel prices “has to do with an international conflict” in a market, the Middle East, where Portugal does not buy oil or gas, but which influences price formation mechanisms.

labor law

Luís Montenegro said that an agreement between social partners on the review of labor laws is important before a diploma reaches parliament, but stressed that the Government will present a bill in any scenario.

“We will conclude the negotiation process with the social partners. We are a Government that gives primacy and preference to this dialogue, but the sovereign legislative option is up to the deputies. And the Assembly of the Republic will have to decide”, he said.

Montenegro then said that it would be “more advantageous and constructive for the Assembly of the Republic to take this decision based on a social consultation agreement that brings together employer entities and confederations with trade union entities”.

“I believe it is good for democracy that parliament, without losing its sovereign sphere of decision-making, can be equipped with this agreement to be able to configure a final solution that can accept and respect it”, he reinforced.

Although, if there is no agreement in terms of social consultation, according to the prime minister, the Government will also not fail to present a proposal of law in parliament.

“If this is not the case, the Government will not fail to present a bill and naturally the deputies will be able to take a position on it”, he added.

The (little) power of unions

In this matter, the general secretary of the PCP contested the labor package proposed by the PSD/CDS-PP Government, and the prime minister accused him of speaking abusively on behalf of the workers and considered that the union movement itself had lost representation.

Paulo Raimundo claimed that the Government wants to generalize precariousness and asked Luís Montenegro “three concrete examples of your proposal that in view of the current law improve the lives of workers“.

The Prime Minister spoke of “two points in particular” which in his opinion “have been the most controversial”. He pointed out the ‘outsourcing’ as a mechanism to increase efficiency and improve results for companies, and argued that a hour bank negotiated between employers and workers “results in more well-being” in the workplace.

Afterwards, the head of the PSD/CDS-PP executive criticized the general secretary of the PCP, saying that “he speaks on behalf of the workers as if he had this power of representation, and he does not”, and considered that “even the union movement today does not have the degree of worker representation that it so often claims“.

“And I say this is not to underestimate or devalue it. It is just so that it is not said, it is not used in a way that, in my opinion, this way of speaking on behalf of workers is abusive. It is like those who speak on behalf of the Portuguese and then have a seat or three seats in the Assembly of the Republic”, he added.

Luís Montenegro argued that “whoever has the power to represent workers is each one of them individually, and it is, at most, the representation that workers make when they go to the polls and choose their representatives in this Assembly of the Republic”.

Social Security

The Government will approve today, Thursday, the postponement the deadline for payment of contributions to the Social Security due in the months of April, May and June for the freight transport.

The Prime Minister revealed that, in addition to this measure to face the effects that the conflict in the Middle East is having on the economy, the government will ask the European Commission “to derogation of the directive that imposes a limit on State aid for 300 thousand euros per company“, to allow “additional discounts within the scope of the fiscal policy for the formation of fuel prices”.

At Thursday’s Council of Ministers meeting, the Government will also approve “a support program for 30 million of euros for vehicles transporting goods on behalf of a third party” and 10 million of euros for the collective transport of passengers subject to public service obligations, “paid in one go”, indicated the prime minister.

The Prime Minister returned to refuse ICMS exemption for basic food basketjustifying that “it does not have the effect that is intended by those who announce this proposal”, and said that the Government is “idealizing other measures, if deemed appropriate and convenient, which could be aid to consumers, in particular those who have more difficulties”, but without revealing details.

“Money out”

André Ventura accused the Government throwing “waste money” into health and dropping new units, which the Prime Minister denied, guaranteeing that nothing will remain undone and other sources of financing will be found.

“We had a fight between the PSD and the PS during the last years of the Government saying ‘no, no, we have to have everyone with a family doctor, we have to have everyone with the possibility of even accessing the oncology specialty’, and now we have the executive director [do SNS] saying no. And, in addition, we have worrying news about the money that the Government has been throwing away”, stated the Chega leader.

Ventura said that “311 million euros were sold from the PRR and things like the Hospital Oriental de Lisboa will no longer move forward”.

In his response, the head of Government highlighted that “the reprogramming in the PRR does not jeopardize the execution of any projectonly the source of financing changes for reasons of managing the execution path”.

“Nothing will be left undone due to the reprogramming of the PRR. The funds are destined for other objectives and we have found another source of financing”, he indicated.

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