The PS (Socialist Party) has no idea about how to get the country growing. With this budget, we are also certain that they have no idea about how to control public expenditure.

This should worry us all because this is beginning to repeat the scenario of high levels of public debt, anaemic growth and excessive public expenditure that led to the financial intervention of the “troika” in the last decade. The country is navigating blind, pandering to the electoral interests of their socialist clientele while never getting out of the clutches of the communist winds needed to approve the state budget.

The 2022 state budget points to weak growth in comparison with the other European countries in our economic league. Without the Recovery and Resilience Plan, Portugal would end the year of 2022 around 2% below 2019, one of the last to recover in European terms. We fell further and recovered more slowly; this is the brand of socialism in Portugal.

There is no significant reduction in the fiscal burden but there is, as is the socialist tradition, an increase in expenditure, especially in terms of the state sector wage bill. Much of the conjunctural public expenditure has now becomes structural. Even the ex-minister and now governor of the central bank, Mário Centeno has already warned of the risks of the weight of this public expenditure.

Almost all of the decrease forecast for unemployment in 2022 stems from the increase in state employees with a number that shall then far exceed even the record from the times of José Sócrates. Hence, through conjugating the rise in the number of employees, career promotions and wage increases, the public wage bill shall grow by over 5%.

Companies and private initiative do not exist for this budget. There is not a single structural reform that attracts capital and investments and just some very timid fiscal incentives subject to highly complicated rules and labour restrictions specified by those who have no idea about how the economy works. The only thing that these minor measures stimulate are the headlines in newspapers and nothing else.

There is nothing of substance for companies in this budget and what there is does not work and becomes ever more complex, such as the Extraordinary Fiscal Credit (already now into its third year…) for Investment. They have no idea.

This is also a budget that insists on the ideological short sightedness of having public services providing almost exclusively for the state. In health, the data from various public entities demonstrate that public and private partnership hospitals return better indicators and generate savings for the state but the socialist government, out of pressure from the communists and the BE, insists on not investing in this model.

In education, the government would prefer to throw money at the problem of the lack of conditions in public schools even when there are private or cooperative alternatives that are able to provide this service at a cost that the Ministry of Education has already admitted would be an average cost per student below that in the public education sector.

The government announced with pomp and circumstance that this budget is for the middle classes and the young but what it provides are merely meek measures and similar to those that have not worked in years gone by. The best example of this is the IRS Jovem (Youth) program, with its past results unknown and that is now going to be expanded. The program provides for a saving of two months of salary at the end of… five years. Therefore, the PS government thinks a young person will give up on emigrating because in five years they will save what they might earn in just a few weeks in another developed country. They have no idea.

Remaining with the IRS tax system, the government proposed to subdivide and therefore to create two more scales. Portugal will become one of the European countries with the most scales – nine – on top of which there are two solidarity taxes on the higher rates. The European average is five scales and more liberal countries normally have still fewer through prioritising fiscal simplicity.

A system with so many scales highlights the disincentive to work that the progressive nature of taxation causes in raising the ease of passing up through scales. In order to be able to again rise in life through labour, Portugal does not need more scales, it needs less. There is no need for these high rates of taxation, they need to come down.

The government know this so very well that is already applies this but just not for Portuguese resident in Portugal. The Regressar (Return) program, which reduces the IRS paid by emigrants who return to the country by 50%, is to be extended. Non-nationals resident in Portugal pay a single IRS tax rate of 20%, a benefit that is now going to be extended to the digital nomads. A single rate for some and fiscal complexity for others. Resident Portuguese have no means of avoiding having to pay high and complex taxes.

Our proposal is in the public domain: evolving gradually towards a single IRS rate beginning with a system of two rates – simpler and more able to induce growth. This would certainly be a better utilisation of public resources than the billion euros that the government is going to inject into TAP this year. Furthermore, this lightening of the fiscal burden would be later recovered through indirect taxes and additional economic growth. And without resolving the economic growth problem, Portugal will not resolve its other problems.

There is too much state in our lives, in our companies and in our society. A heavy state, incompetent and generating dependencies and compatriots that prevent the Portuguese from giving the best of themselves. The vision Iniciativa Liberal has for Portugal is very different. Because we trust in the Portuguese, we want to release them from the excessive limitations that the state imposes on them.

This budget does not sake a single step in this direction because the PS has no idea about how to do it.