Nearly €4 billion in spending will go to the National Budget (OE) for 2023, largely thanks to the new package of measures to help families withstand the effects of inflation. Under the immutable policy framework for 2023, which the Ministry of Finance has sent to the Assembly of the Republic, the government estimates that “the total impact of the deterioration of the budget balance in 2023” will be “more than 3,900 million euros”, almost doubling last year’s forecast (2,053 million euros).
This document, “which includes income and expenditure liabilities with an impact for the next year”, shows that of the nearly EUR 4 billion going to next year, about two-fifths, i.e. EUR 1,427 million, relate to pensions, social certainty and Caixa Geral de Aposentações. Regularly updating the benefits, which have since been adjusted by the cabinet proposal, costs 1,155 million euros and the increase in the average pension and the variation in pensioners weighs 272 million.
As for the change in the reform auto-update formula, the document recalls that it has already sent the proposed amendment to Parliament for 2023. So to 886 euros the increase decreases from 8% to 4.43%; between 886 and 2659 euros, the expected increase goes from 7.64% to 4.07%; and between 2659 euros and 5318 euros, the update that would be 7.1% drops to 3.53%. The cabinet proposal will be discussed in the House of Representatives on Friday 16 September at 10 a.m. and can be voted on the same day. Approval is guaranteed by an absolute majority of the PS. It is recalled that these reductions in the percentages of the update are a counterpart to the bonus of more pension that will be awarded in October to all pensioners with monthly benefits of up to 5318 euros.
Interest owed by government agencies, with an impact of 591 million euros, is the second item that will weigh the most in the 2023 OE. This release “refers to interest on government debt and the financial cost of the financial debt of companies reclassified public funds , as well as the interest owed by the remaining subsectors of public administrations,” explains the Treasury Department.
Personnel costs, including the effects of promotions and promotions, continuous recruitment and the expected increase in the minimum wage at the National Service, amount to EUR 553.9 million. It is the third sector that will deteriorate the most in next year’s OE.
The “intermediate consumption” is expected to have a negative effect on the next OE by 550 million euros. These costs correspond to “structural expenditure, in particular related to health and the operating costs of the different entities, including the expected increase in charges prompted by the increase in the prices of goods and services, namely energy”, in accordance with the framework of invariant policy until 2023.
The cost of “structuring of investments” is expected to be EUR 457.2 million. This item “aggregates the structuring multi-year investments, under contract or in progress, with a strong budgetary impact in the year 2023, the total value of which is more than 0.01% of government expenditure,” according to the government report. This publication does not include the public companies outside the scope of public administrations, nor the structuring investments included in the Recovery and Resilience Plan (PRR), financed exclusively with European funds.
Low cost family benefits
Of the items with the least impact, the emphasis should be on strengthening and expanding family benefits, which should cost 13.1 million euros; the Military Programming Act, with a spending of 20 million; and free childcare for the 2022/2023 school year, for 40 million euros.
It should be noted that the reduction in VAT on electricity from 23% to the minimum rate of 6% in the first 100 kWh consumption (or up to 150 kWh for large families) for a contracted power of 6.9 kVA will only have a cost of 67.5 million euros in 2023.
The invariant policy framework is more than a week late. The document should have been delivered to Parliament by August 31. At the time, Finance Minister Fernando Medina sent a note to members of the Budget and Finance Committee requesting that the deadline be extended to accommodate the support package, targeting families, to mitigate the effects of inflation.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
