Portugal's 2016 State Budget at last approved despite opposition rancour

The economists who participated in Bugdet Watch 2016 consider that the State Budget for this year is the best since 2010, the year in which the annual study started.

The study is a cooperation between the Institute of Public Policy, the Instituto Superior de Economia e Gestão and Deloitte.

The budget was evaluated under the "perspective of rigour, transparency and fiscal responsibility," read the summary which awarded a mark of 46%, seemingly low but the highest yet.

A score in the 40% range is described as "insufficient" with four more points needed to get to 50% and "satisfactory."

The positive points were an "apparently improved realism about the macroeconomic scenario and about objectives for tax revenues and the overall deficit."

The macroeconomic scenario is considered "satisfactory" for the first time, with an improved score for realism in setting budgetary targets.

The less successful aspects where the assessors highlighted concerns were public spending (personnel and procurement of goods and services), as well as costs in the health care sector.

One aspect not taken into account was the historic vote by the left wing parties to accept and vote for a State Budget which finally was approved on Wednesday.

The left wing parties voted for the budget with the former coalition partners, the PSD and the CDS, both voting against. The lone MP for the People Animals Nature party, abstained.

The final parliamentary debate was marked by the accusations from the opposition, including the Social Democrats, despite not having suggested any amendments to the budget detail.

The Finance Minister, Mario Centeno, was critical of the silence from the opposition benches, saying that the silence was not democratic and certainly not what was expected by those voters who had elected opposition MPs.

The Greens MP, Heloisa Apolónia, accused the Social Democrats of not having given up on the budget, "but on the country," by failing to submit any amendments.

The parliamentary leader of the Social Democrats, Luís Montenegro, retorted that the party did not vote against the budget due to a tantrum, but "because it is a bad budget for the economy, it scares off investors, it aggravates costs, penalises tax competitiveness and does not help families."

Among the main measures for 2016 are the gradual reinstatement of public wages through the year and the reduction of the surcharge on personal income tax, both measures to return part of the income that households lost during the austerity period.

However, the budget raises some indirect tax, particularly on vehicles (ISV) on oil products (ISP), on tobacco (IT) and on alcoholic drinks (IABA).

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