The latest highlights from the second government led by Luís Montenegro include the establishment of an autonomous ministry for a thorough state reform, proposed amendments to labor laws including strike regulations, a review of the Health System’s foundational legislation, and an anticipated increase in defense investment to 2% of GDP within the year.
Stricter immigration control is a main pillar of the new administration’s program, introducing a Transformative Agenda. This agenda identifies ten priority action areas for the government.
The priorities outlined by the executive include: “a work-focused income policy”; “comprehensive state reform and reducing bureaucracy”; “wealth creation through economic growth”; “regulated and humanitarian immigration policy”; “accessible and quality essential services across public, private, and social sectors”; “community-oriented security”; “expedited justice and corruption elimination”; “a national effort to address the housing crisis”; “development of new infrastructures”; establishment of the “Water that Unites” project, and a strategic defense investment plan.
Outlined below, by sector, are some of the main commitments expressed in the government’s program:
State Reform
The government aims for a “net reduction” in state administration entities through reorganization involving the abolition of sector-specific secretariats, removal of redundant structures, and merging of entities.
A comprehensive evaluation of state workers will also be undertaken to foresee needs and uncover “redundancies,” fostering workforce redistribution.
The Minister of the Presidency, António Leitão Amaro, confirms that this state reform will not lead to public worker layoffs or salary cuts.
The government program also pledges to “complete the review of public administration careers,” advancing towards a simplified evaluation system that prioritizes performance over seniority as a progression criterion.
Further, it plans to revise “state-owned enterprise governance to enhance transparency and qualification, and to divest non-strategic stakes,” and launch a “gradual decentralization of certain core state administration services to regions outside the capital city.”
Included in the state reform measures is “an overall review of public expenditure” in key ministries, aimed at sharing savings with entities, services, and workers.
Labor
The government aims to better “balance” the right to strike “with the fulfillment of essential social needs” and to revise labor legislation, “ideally within the framework of Social Concertation.”
Additionally, it aims to review the allocation and oversight regime of social integration income (RSI), which may include “solidarity obligations,” and introduce a job incentive benefit.
The goal of this benefit, replacing “a broad range of social supports,” is to allow “working income to be combined with social support,” thus promoting “active participation in the labor market.”
The government also wishes to increase flexibility in workers’ holiday management, allowing for the purchase of vacation days, with limits defined contractually, and enabling workers to choose whether to receive vacation and Christmas bonuses in installments or traditionally.
The government also seeks to enhance the possibility of transitioning, “even if temporarily,” between weekly work schedules, “with possible salary percentage adjustments,” and to enable telecommuting agreements.
Additionally, the government is considering a shared parental leave with an alternative caregiver for single-parent families.
Immigration
The administration intends to revise nationality laws and extend residency requirements for Portuguese citizenship, increasing the minimum period of residency, and disallowing illegal stays as part of the required residency length.
The government is committed to reviewing the foreigner and asylum laws, “limiting migration flows, particularly family reunifications, according to the capacity of public services and societal integration.”
There also are plans to limit work-seeking visas to highly-qualified candidates and consider the introduction of language proficiency requirements for certain residence permit renewals.
The government wishes to “review the Residence Certificate Issuance process by parish councils” and “implement the Good Return Program,” designed to help those wishing to return to their origin country but unable to do so unaided, along with advancing the creation of a National Foreigners and Borders Unit within the PSP, previously rejected in the last legislature.
Salaries and Pensions
The government plans to increase the minimum salary (currently 870 euros) to 1,100 euros by 2029, increase the average salary to around 2,000 euros by the end of the legislature, and ensure no pensioner earns below 870 euros at that time, with ongoing pension value increases and hikes in the Solidarity Supplement for the Elderly.
Taxes
The administration proposes a reduction in personal income tax up to the 8th bracket, amounting to 2 billion euros by 2029, with a 500 million reduction as early as 2025 (in addition to what is planned in the State Budget for 2025).
For corporate tax, a gradual reduction to 17% by the end of the legislature is planned, with a reduction to 15% for SMEs on the first 50,000 euros of taxable income.
The government ensures the continuation of youth-attracting measures, such as “structural and enduring reductions in Young IRS” and maintaining exemption from transmission tax, stamp duty, and public guarantee for first home purchases for those under 35.
The government program hasn’t updated budget scenario estimates, but the administration reaffirms in its Finance chapter that “budget balance and public debt reduction are essential for sustainable economic and social development.”
Health
The government aims to revise the Health Foundation Law, effective since 2019, and approve a new Health Resources Law for the NHS, claiming these legislative changes are crucial for ensuring the Portuguese health system’s sustainability.
The administration will also establish regional emergency units with shared teams among hospitals, prioritizing “the most critical specialties” in human resources, such as obstetrics and pediatrics.
In hospital care, there’s also a plan for a new National Access to Consultations and Surgeries System (SINACC), which will include timely access to diagnostic complementation means, replacing the current Integrated Management System for Surgical Lists (SIGIC).
Another measure included in the Government Program is the restructuring of “NHS management through its reorganization based on Local Health Systems with the participation of public, private, and social entities.”
The government also aims to launch new public-private partnerships (PPP) for health units that “meet criteria ensuring better healthcare response,” under a private management model for public NHS services.
Education
The administration plans to prohibit smartphones in schools during the 1st and 2nd cycles and restrict usage among 3rd cycle students, standardizing recommendations made at the start of the 2024/2025 school year.
Creating study support services for underprivileged or at-risk students and developing “a new autonomy and management model for schools” in collaboration with principals and teachers are other objectives, alongside revisiting and updating the contract models for association agreements.
The philosophy, in both health and education, involves “transitioning to a paradigm where public schools and hospitals have the same management and budgetary autonomy as those in PPP regimes or association contracts” and “converging towards indistinction between public or private provision.”
Housing
The goal is to construct 59,000 public homes and provide financing for more projects, including public-private partnerships for vacant state properties with housing potential.
The administration proposes creating “an exceptional and temporary regime to accelerate private or cooperative construction and renovation,” promising significant fee reductions and applying a reduced VAT rate of 6% for construction and rehabilitation works, along with simplifying urban licensing.
The government also proposes revising the urban lease regime and unifying various existing public rent support models into one, committing to introduce long-term secure lease contracts.
Justice and Corruption
The government will form a working group of academics, magistrates, and lawyers to expedite processes and eliminate large-scale cases.
Proposals include, without specifying means, changing Supreme Court of Justice access rules to ensure “rejuvenation of the advisory judge body, mitigating imminent judge shortage risks at the STJ.”
Plans also include reviewing “parole regimes and successive sentence execution, as well as penalty flexibilization mechanisms” and enhancing prison security with signal inhibitors to prevent illegal cellphone and drone use within facilities.
In the fight against corruption, the government emphasizes implementing measures from the previous legislature’s Anti-Corruption Agenda, such as lobbying regulation and tracking the legislative “footprint” of the government.
Security
The focus is on “enhancing visibility, proximity, and community policing to strengthen public peace,” through the rearrangement of PSP officers and GNR soldiers, partnerships with local authorities, and revising municipal police legal frameworks.
The government also aims to reduce “crime rates, particularly serious and violent crime,” and to bolster efforts against juvenile and group crime, domestic violence, harmful digital content for children and youth, road accidents, cybercrime, and misinformation.
The program commits to a strategic plan to combat drug trafficking and consumption and reviewing related legislation.
Defense
The goal of reaching 2% of GDP investment in defense this year, originally set for 2029, is anticipated, with a fifth of this allocation dedicated to goods, infrastructure, and equipment.
Without specifics, this strategic reinforcement plan’s core measures include encouraging dual-use investments, both military and civilian. There are two preconditions for reaching this target: maintaining the national social state model and creating a favorable environment for national security and defense industries, recognized for their potential public investment multiplication effect due to their internal expense absorption capacity in this field.
The establishment of public-private partnerships in strategic National Defense areas, citing the OGMA model, is another proposed measure supporting defense industries.
