The proposed government budget for 2023 (OE2023) includes a package of one-off, allegedly extraordinary expenses of EUR 574 million. It is almost as much as the financial support granted to TAP in 2022, which amounted to 600 million euros (in the national accounts).
In OE2023, the largest additional cost is expenditure authorizations to pay compensation to EDP for a dam and to reimburse another company in the event of a dispute under the Algarve Litoral Roads Public Private Partnership (PPP).
These two charges entail an additional cost for taxpayers of €454 million.
In addition, the Ministry of Finance, led by Fernando Medina, still has 120 million euros in (tax) charges with the so-called “deferred tax assets”.
The amounts in question, which will fall into next year’s accounts, were confirmed by the Public Finance Council (CFP), which released the analysis of the OE2023 proposal yesterday, and by the Technical Unit for Budget Support (UTAO), which has performed similar work.
Today the debate starts in parliament on the generality of the budget proposal for 2023. The aim of the government is to reduce the government deficit (in the national accounts) by an estimated 1.9% of gross domestic product (GDP) this year. to 0.9% of GDP next year.
According to the CFP, “with regard to costs, the values of the following measures were considered one-off: (i) deferred tax assets in 2022 and 2023; and with an impact on only 2023; (ii) the extraordinary payment by court decisions related to to an EDP dam and (iii) a fee charged to IP – Infraestruturas de Portugal”.
“The effect of one-off measures planned for 2023 is 574 million euros”, with “compensation of 236 million euros to be paid by Infraestruturas de Portugal; a court decision prohibiting the return of 218 million euros to the EDP within the scope of the operation Fridão Dam and; 120 million euros related to the expense of deferred tax assets)”, the CFP reports.
“No action is expected in the OE/2023 proposal [extra] on the revenue side for the analyzed years, 2022 and 2023,” adds the Council, chaired by Nazaré Costa Cabral.
For example, in 2023, Medina will ask parliament for permission to spend the equivalent of 0.3% of GDP, an amount that will already be absorbed in the target of 0.9% for 2023.
UTAO recalls that the costs of the EDP dam case in July were borne by the Ministry of the Environment, but it will eventually drag on and its impact will be in 2023.
About three months ago, the Ministry of the Environment, under the supervision of Duarte Cordeiro, confirmed that, by decision of an arbitration court, “the State is ordered to repay to EDP the amount of EUR 217.798 million, which it had paid at the time of conclusion of the contract, as a financial consideration for the exclusive right to explore Fridão during the concession period”. The bill should eventually arrive in 2023.
As mentioned, the new OE also has to pay 236 million euros “costs arising from a court decision regarding the Algarve Litoral concessionaire”.
In this case, Rotas do Algarve Litoral, of the Tecnovia group, is the company claiming compensation from the state (and this must be done through a court order).
Less support, less shortage
The CFP’s analysis also indicates that the government deficit should fall in 2023 (compared to 2022), especially as there is a lot of public support that will not be repeated next year, the new OE said.
For example, the GVB points out that the measures of the Families First package will almost all disappear next year.
Nevertheless, the CFP predicts in the new study that the deficit will fall less than the Ministry of Finance (MF) has stated. It falls from 1.9% of gross domestic product (GDP) in 2022 to 1.1% of GDP in 2023 (Minister Fernando Medina moved forward with a target of 0.9%).
According to the entity chaired by Nazaré Costa Cabral, “The reduction in the deficit between 2022 and 2023 is largely due to the reduction in costs with the pandemic and the failure to repeat in 2023 some of the recently announced measures to reduce the impact. of the pandemic. inflation”.
The Council assessing public finance management notes that among these “not to be repeated” measures, the Families First package and the EUR 1000 million aid to ease companies’ gas bills stand out.
Unknowns and risks in 2023
However, the CFP warns that “a deterioration in the economic situation in the main destination countries for our exports of goods and services, including tourism, as well as higher-than-expected increases in prices, especially energy and food, are the main budgetary risks, due to the impact they would have on revenue collection and the need to strengthen support for families and businesses”.
In addition, according to the CFP and UTAO, there are other unknowns, such as the need to provide new financial support to TAP and funds for Novo Banco (which are currently no longer from the state, but are considered government expenditure because they pass the resolution). Fund, increasing the deficit).
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
