En Vivo/Medina: Without the support program, the deficit would be 0.9%. “We return all the additional VAT collection that we expect to have”

Carla Castro, from the Liberal Initiative, questions Medina about the impact on the Social Security stabilization fund of the “ideological” option of investing more than half of the 24.6 billion euros in public debt. And she says that the rise in interest rates has caused yield drops in the assets of the fund that serves as a cushion for the payment of pensions. And she asks Medina to quantify those losses.

After making the reservation “he is not going to take it badly”, the minister compares the concern of IL with the “fox out of the henhouse worried if the hen got fat”, accusing the party of having a strategy to end the current public Social Security system because it defends individual capitalization and without solidarity.

“The PS does not accept lessons from any party on the sustainability of Social Security” and pulls the strings by recalling that it was part of the Vieira da Silva team that approved the 2007 reform (as Secretary of State) that was rejected by other parties .

The Minister of Labor, Solidarity and Social Security, Ana Mendes Godinho, has already arrived at the room where the parliamentary hearing will take place, after the controversy over the more limited update of pensions in January 2023 and the uncertainty about what the Government will do .do with the calculation formula in the following years.

There are also doubts about how the Social Support Index (IAS), which serves as a reference for the attribution and calculation of various social benefits, will evolve in 2023.

The calculation formula makes the IAS dependent on inflation and economic growth, as in the case of pensions. But the government has avoided saying whether it will also limit its increase next year.

For the fifth time, the Government returns to the pension formula to stop increases. Pensioners start losing from 2024

Pedro Afonso do Partido Chega takes advantage of the hearing with the Minister of Finance to ask questions about the frustrated hiring of journalist Sérgio Figueiredo, after the minister’s hearing was unsuccessful. And he invokes the news that was made public about the contractual relations of the former director of TVI and his son and the Lisbon Chamber when Medina presided over it.

“What was at stake was recruiting the person for the place or the place for the person?”

Medina replies: “I will not spend a word responding to the insidious and slanderous slander that he intended to verbalize” and refers to the statement he made when Sérgio Figueiredo rejected the position. Medina reaffirms that the needs identified for this contract are maintained —evaluation of public policies and contacts with private partners— and leaves a piece of advice to the deputy: “I recommend that you do not believe everything you read in the newspapers.”

Fernando Medina accuses the opposition of devaluing the package of anti-inflationary measures and insists that it will make a difference in the lives of families.

The Minister of Finance also takes advantage of the time of the PS to show the correct accounts that allow him to say that the Government will return all the extra income collected in VAT in the anti-inflationary package.

“This program is worth one percentage point of GDP, if we didn’t do it, the deficit would be 0.9% instead of 1.9% in 2022, but we decided to keep the goal. What we did was return the VAT collection”.

In this year’s Budgets, the State provided 19,200 million in VAT income. In the most optimistic scenario of economic growth, says Medina, the additional income until February of next year will be 2,480 million euros, which is compared to the program that has the same value.

The finance minister is now responding to the socialist deputy Miguel Cabrita by repeating arguments about the need for a balance between the support dimension and public accounts.

We must be able to make decisions that do not compromise our ability to act in the future. This balance is very important. We could increase the deficit, European rules allow it, but in a scenario of worsening interest rates, where would that put us to help those in need? The worst. There are those who say that we should not spend so much, but that would be committing to help those who need it most.

Still in the response to the PSD, the finance minister corrects the argument that Portugal is growing above the eurozone average.

The Portuguese economy is growing above all the countries in the eurozone and not just the average and cites growth forecasts in 2022 for all states.

Still in the response to the PSD, Fernando Medina refers the proposal for wage increases in the State to negotiations with the unions, after António Costa pointed out that a starting point would be 2%.

Deputy Hugo Carneiro also questioned Medina about whether he will comply with the law in calculating the update of social support indexes, which also follows inflation. Or are you going to change accounts like you did in pensions?

The Finance Minister only says that this issue is still being evaluated and will be announced in due course. This index serves as a reference for various social benefits, such as the minimum unemployment benefit, sickness benefit, family allowances.

From tolls to pensions and social benefits. The increases that could bring the highest inflation in 30 years in 2023

“But the government has done and will continue to do everything it can to protect the most vulnerable.”

In the past, the updating of the social support index according to the evolution of inflation was suspended for several years, especially during the troika period.

Fernando Medina is already beginning to answer questions from Hugo Carneiro of the PSD. “As far as pensions are concerned, there is no artifice, no trick referred to by the deputy and his party. There is no loss of purchasing power with respect to the year 2023.

“No pensioner will be devalued when they enter their half pension account in October. Mr. deputy devalues ​​it. Next year’s increase will be the largest since the current formula is reached between 4.43%, 4.7% and 3.5% for the highest pensions. And we’re announcing it now for the sake of transparency. An illusion would have been to announce the anticipation and not the increase.

The Finance Minister now refers to the support package announced last week to underline that just in response to inflation we are mobilizing more than 4.00 million. This program returns all the additional VAT that the State has collected, contrary to what many say.

Could we go further? We go where we can go. Given the scale of the conflict, no government in the world can eliminate this impact, stresses the Minister of Finance.

Fernando Medina says that GDP growth should reach more than 6% this year, above our expectations, which leaves Portugal better positioned against its partners. And he repeats that the accounts are still correct, a guarantee that we do not agree to waive.

Fernando Medina begins by recalling the current situation. The war is not only fought on the ground, gas and fuel have been used as a weapon and impose severe costs. Goods are more expensive. Inflation rates jumped from 2% to more than 7%. Forecasts were exceeded. Portugal is not in the most urgent position of the European plan. It is a reality that must be accepted. It is true that we do not know how much longer we will remain at this juncture. The external context is increasingly difficult. The ECB took shocking action and revised down forecasts. A balance must be found between easing the burden of inflation in the present and preserving the future.

Fernando Medina has just entered the room and will start the audition. One of the obligatory topics will be the European Commission’s proposal to tax extraordinary profits, reaffirmed this Wednesday by Ursula von der Leyen.

Good day,

One week after presenting the package of measures to support families, and just under a month after the delivery of the General State Budget proposal for 2023, the Minister of Finance will be heard by the deputies of the Budget Commission and Finance, within the scope of the Regulations of the Assembly of the Republic.

You can follow the hearing on this liveblog, which will be added, starting at 12:00, to the hearing of the Minister of Labor, Solidarity and Social Security, Ana Mendes Godinho.

How does the pocket move the anti-inflation package? 25 answers