Costa admits new minimum wage increase in 2021

Prime Minister postpones the review of the IRS levels, scheduled for 2021, for the budgets of the following years

The prime minister admits to continue to raise the minimum wage next year and create an exceptional income because of the pandemic, but postpones the revision of the IRS levels, scheduled for 2021, for the budgets of the following years.

“We want, for example, that the national minimum wage can continue to rise. Naturally according to what the economic dynamic is today, which is very different from what existed a year ago. We will certainly not be able to have an increase of the size we had last year, but we want an increase», stressed António Costa, in an interview with the weekly newspaper Expresso.

For the head of government, the response to the economic crisis caused by the pandemic "cannot involve cutting income, but rather protecting it", and also cannot "passing an increase in taxes, but maintaining fiscal stability to create conditions for companies to resist” without destroying jobs, bearing in mind that, in the current context, Portugal will depend “a lot on global demand”.

Asked if there will be a freeze on progressions and promotions in the civil service, António Costa guaranteed that “there will be no new freeze”.

However, since "inflation is currently negative", the prime minister assures that it will not be possible to maintain the "commitment of an increase of 2021% in 1,1".

“If there is an increase in the minimum wage, it will imply that the minimum wage in the civil service will have a boost. But we are at an early stage, the dialogue has not started yet,” he added.

António Costa was also asked whether the socialist executive is planning to extend to 2021 the social support measures approved in the context of this crisis, such as, for example, the extension of the unemployment benefit until the end of the year.

In response, the chief executive said that the measures should be extended or "a new social benefit should be created that is specifically designed for this reality" Covid-19.

“In the design of the measures, we must be careful to distinguish those that tend to last beyond the pandemic from others that are exceptional and only valid for this period. We can never forget that there is always a tomorrow», completed the secretary general of the PS.

António Costa explained that it is necessary to design “a measure for those exceptional situations” that Covid-19 introduced, namely for people who “had relatively high incomes, to be eligible for these social benefits”.

This support will, therefore, be aimed at workers in the sector “of culture, events, in sectors of tourist activity”, who had to face “a situation of absolute fall in income”.

António Costa considered, however, that "it is very unlikely that it will be in the 2021 [State] Budget" that the IRS (Individual Income Tax) levels will be revised.

“Surely the 2022 and 2023 budgets are other opportunities. It is also why we insist with our parliamentary partners that the dialogue should not end with the 2021 Budget. It is very important that it be associated with the economic and social recovery program, with new realities of labor legislation that require urgent intervention and that take into account the budgets for 2022 and 2023», said the leader of the executive.

When asked whether it is essential to review the levels of the IRS during this legislature - which ends in 2023 - Costa rejected using "words that are irrevocable or essential", but acknowledged that it was "necessary for the country" to happen.

“If we don't review the tiers, it's not because we stopped believing it's important, it's because we have to adjust to reality. Nobody has any doubts that the scenario in which we are preparing this SO2021 is different from the previous one and requires us to look at this Budget also thinking about the following», he explained.

Costa also guaranteed that the Government will "use the legislative authorization later this year" which was granted "for the reduction of VAT" on electricity.

This measure "will enter into force later this year", since the reduction in VAT on electricity is "cut across all households".

António Costa also assumed that there were failures in the situation involving the home in Reguengos de Monsaraz - where 16 users infected with the new coronavirus (SARS-CoV-2) died, but stressed that the institution "is of a private foundation" and that, "when it was alerted, the state reacted immediately."

The outbreak in Reguengos de Monsaraz caused 162 cases of infection, mostly in the FMIVPS home (80 users and 26 professionals), but also 56 people from the community, with 18 people dying (16 users, a housekeeper and a man from the hospital. community).

Costa reiterated that he maintains confidence in the minister of Labour, Solidarity and Social Security Ana Mendes Godinho: “the minister clearly said that she did not devalue what happened, and more: the performance we had demonstrated that we did not devalue it. It should not be forgotten that in April we had 363 outbreaks in homes and yesterday we had 80. We did not wake up now because of the report of an entity [Doctors' Order] that does not have the legal competence to carry out this study».