The Finance Minister, Maria Luis Albuquerque, said today that there are no conditions for lower taxes next year, but she hopes that this will be possible in 2015.
"We have not had the conditions to lower the tax burden in 2014, we hope that in the 2015 budget there can be a little more slack to reduce the tax burden that affects workers," said Albuquerque this morning.
Asked about the additional pay cuts in the 2014 budget the Finance Minister said there are no conditions that would enable an increase in the salaries of public sector workers, or pensions next year, adding, “and no one can accuse us of deceiving the Portuguese public, we're being completely transparent."
Socialist MP João Galamba accused the government of resorting to duplicity by imposing deep cuts that, once again, will have no results.
"The results are a tragedy, and the optimism of the Minister of Finance is not understood. This is not a new economic cycle, it is all exactly the same,” said Galamba in the committee meeting at which Albuquerque was being questioned by MPs.
The Finance Minister assured her audience that the government is not trying to pit the public sector against the private sector, and admitted that the private sector had adjusted to the economic crisis as soon as it started, whereas the state sector was late in making the necessary cuts in spending to reflect the country’s poor economic health.
This may explain the increase in Portugal’s borrowing but does not explain why this predictable situation was allowed to develop.
Maria Luis Albuquerque argued that the 2014 Budget is fair and that the government’s strategy makes sense, which is to "build results. The way forward is to continue to reduce debt and continue with fiscal consolidation so we don’t have to ask for more help.”
The Communist MP Paulo Sá said this budget is the worst ever for civil servants and pensioners.
In summary the Minister of Finance highlighted that fiscal consolidation has taken effect and should continue to be the strategy of the Government, This effort was difficult and had high costs, particularly in terms of unemployment, but we know already that this has produced results and that this is the way forward."
Comments
The effects of austerity policies during a recession are well known.
Destitution, starvation, and instability.
Government spending must be reduced during boom years.
Unfortunately, these decisions are made by politicians.