Opposition leader calls for salary hikes

The President of Portugal’s main opposition centre-right PSD party, Luís Montenegro said today that Portugal needed to take a risk by paying better salaries in Portugal’s public administration and companies.

This suggestion, made at a business event organised by the American Chamber of Commerce in Portugal (AmCham) on Wednesday was made just one day after the President of the European Central Bank, Christine Lagarde had warned at the annual European Central Bank conference in Sintra that the current installed inflation was now being caused by increased salaries.
The policy also flies in the face of advice from industry sector associations in Portugal which only last year said salary increases should only be made in line with company productivity to keep Portuguese businesses competitive.
The leader of the main opposition party admitted “it is usual to say that you don’t raise salaries by legislation, and added that even the national minimum wage should not be increased by this means.
“But I confess that we’re going to have to take a risk with the State and private companies too to pay better salaries”, he said pointing to the lack of staff in Portugal’s public administration in key areas such as the National Health Service (SNS), schools, security and the courts.
Luís Montenegro also said the government was going to make political capital by increasing pensions by putting back around €1Bn that it had originally taken away from them.
“The election campaign is already underway: this week we get the news about an extraordinary increase in pensions which is no increase whatsoever, it is simply reimbursing pensioners money that António Costa cut last year.”
The PSD leader said that his party had presented a proposal to be included in the State Budget to update pensions under the terms of the law which at the time had been rejected.
“First he cut and now he comes along with this political number to give them back what he’d already taken away and was theirs”, he said.
He accused the government of being the champion of taxes and said that taxation in Portugal was too high and unpredictable.
On housing he said that while the government seemed to have backtracked on some aspects of the bombshell policies outlined in the ‘More Housing’ package unveiled in February, 2023, the damage to overseas investment confidence had been done, and that he knew of several cases where investors had pulled their planned investments in Portugal and had decided to invest elsewhere.
Luís Montenegro also touched on the persistent problem of Portugal’s low birth rate and warned of a population loss of up to 20% over the next two decades and added that the problem was being “swept under the carpet by politicians”.
In addition to measures to reduce obstacles to having children and to retain young talent in Portugal, the PSD leader again argued for policies to attract émigrés back and immigrants into the country who he referred to as the ‘new Portuguese’.
These new Portuguese included US citizens relocaters who “can and should contribute towards the economic growth of the country”.