Calls for competitiveness and salary accord

The president of the Portuguese Industrial Confederation (CIP), António Saraiva, says that an agreement on competitiveness and incomes is urgent and should be agreed by June.

“In my view it is urgent to reach an agreement” he said at the end of a meeting with Concertação Social – a working group which works on labour legislation in Portugal – in which the new Minister of Finance, Fernando Medina, who attended, presented the general outlines of the State Budget 2022 to social partners ahead of its formal delivery of the budget to parliament on Wednesday (13 April).
The CIP president said that he still thought it possible to reach an agreement by June, recalling that work already done had “shortened the time” that would have been needed “for a fresh document to be drawn up from scratch.”
António Saraiva was alluding to discussions which had taken place during the previous legislature with Concertação Social in order to try and reach an agreement in the medium term on competitiveness and salaries.
Such an agreement would recommend a “progressive reduction in IRS income tax for all parties which would benefit from income increases” within the framework of the agreement “to assure budgetary neutrality in improving the income of the Portuguese”.
“At the same time, and also within the framework of this agreement, are “proposed adjustments to the IRC structure (corporation tax) that favour best salary practices by companies in terms of income enhancements and reducing disparities in salaries.
The original State Budget 2022 was rejected by the left wing Bloco de Esquerda and Communist parties with which Portugal’s socialist PS government had formed an alliance in parliament in order to govern the country.
It ended in disaster in October 2021, provoking a snap general election precisely because these two alliance parties were demanding salary enhancements and changes in overtime payments (back dated) which the CIP, among other business and industry associations, said SMEs and Portugal’s economy could ill afford because of a drop off in productivity due to the Covid-19 pandemic among several other endemic factors including tighter margins, insufficient competitiveness, and Portugal’s high tax burden on companies.