The budget that nobody wanted to make

I am convinced that the budget could go further in stimulating economic growth, without compromising social effort and the balance of public accounts.

More than the possible budget, the OE2021 is the budget that no one wanted to make one day. There is an absolute need to provide a budgetary response to the devastating economic and social effects of the pandemic, which make the current situation one of the most difficult in our country's recent history.

I therefore understand that, in this complex scenario, the preliminary version of the OE2021 seeks, first of all, to lessen the terrible social impact of the pandemic. Extraordinary income support, the decrease in VAT on electricity, the increase in the minimum amount of unemployment benefit, the increase in lower pensions, the maintenance of support for informal workers, the updating of the national minimum wage ... All of this is justified and it should be welcomed, considering the increase in social problems in the country.

But we must not forget companies, as they are the engine of our economy and the support of families. Some measures are being considered, but what was presented in the budget proposal knows little. It is important at this stage to give SMEs a better fiscal context, in order to reinforce their liquidity, competitiveness and countercyclical investment capacity. This could involve reducing VAT in some sectors or adjusting the IRC, possibly affecting spills.

And if, on the one hand, I agree with the proposal to increase the minimum wage, on the other, I think it is essential to guarantee companies a business environment that allows them to support the respective increase in personnel expenses. I again insist on the need to streamline the application processes for European funds, in order to avoid the current delay in the analysis, evaluation and monitoring of projects. For that, it is necessary to reinforce the intermediate structures of the State, endowing them with resources, namely human, to make the processes more efficient and expeditious.

In this preliminary version of the OE2021, it is also important to welcome the investment tax credit and the non-worsening of autonomous taxation. But I disagree with the end of the Gold Visas in Lisbon and Porto, an investment promotion instrument that seems relevant in the current context. And I look forward to penalizing managers for the worsening of arrears in public companies, knowing the damage they do to the private business sector.

All in all, I believe that OE2021 is not a little more expansionist. I am convinced that the budget could go further in stimulating economic growth, without compromising social effort and the balance of public accounts. Public investment with reproductive effects, for example in the railway, and consumption incentives (“IVAucher” and adjustment of IRS retention rates) are to be praised, although they seem to me to be of short reach. But I already find it hardly understandable that the tax burden and the contextual costs of SMEs remain virtually unchanged.

Business investment should, according to INE, decrease nominally 8,9% in 2020, after the 5,4% growth in the previous year. It is therefore important to give SMEs more conditions to reverse this indicator and resume pre-Covid business dynamism.


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