Business and employment support until the end of the pandemic
The Minister of State and Finance, João Leão, reinforced, during his presentation to the Budget and Finance Committee of the Portuguese Parliament, that the Government will maintain support for the economy in 2021, as it did in 2020.
In the scope of this session, João Leão highlighted the measures taken in 2020 and respective expenses, in view of the worsening of COVID-19, namely the widening of layoffs, the simplified support to micro companies, the widening of the support to the progressive recovery, the widening of the Apoiar programme, which supports the invoicing breaks of small and medium companies, and the reactivation of the support measures of the first confinement for independent workers, family support, among other measures.
Social Security with measures worth 1900 million
The exceptional Social Security measures accounted for 1915 million euros, of which 982 million euros were used for the simplified layoff and support for the Progressive Takeover, 297 million euros were spent on the extraordinary incentive to normalisation, and, finally, 283 million euros were used to support the reduction in economic activity of independent and informal workers.
João Leão also highlighted the exceptional support for the family and the allocation of child and grandchild care subsidy, which cost 90 million, the extension of unemployment benefit and social unemployment benefit, which amounted to 54 million, the stabilisation complement, which cost 58 million, the sickness subsidy, where 41 million was spent, the payment of prophylactic isolation, which cost 63 million, and the extension of social insertion income, social action and other support, at a cost of 48 million euros.
Thus, total State expenditure (Central Administration and Social Security) grew by 6.2%, with Social Security expenditure increasing by 12.5%, i.e. 30 billion euros, a substantial part of which was allocated to the measures to compensate the economic and social effects caused by COVID-19. Without these, Social Security expenditure would have grown by only 5.3%.
Personnel expenditure, especially the hiring of employees for the National Health Service (SNS), grew by 4.1%, or 18.2 billion euros more.
686 million spent on Health
Health spending to combat COVID-19 was 686 million euros, 500 million euros more than was planned in the 2019 Supplementary Budget. The amount was spent on personal protective equipment (209 million euros), on tests (72 million euros), on medicines and vaccines (45 million euros), on ventilators (91 million euros), on personnel (184 million euros), among other expenses (86 million euros).
SNS expenditure grew by 6.8%, staff expenditure grew by 6.1% and investment grew by 65.4%, i.e. 103 million euros more than in 2019.
Economy above expectations in 2020
The Minister highlighted that the economy in 2020 behaved better than expected, with personal income tax revenue being 3% higher compared to 2019, and corporate income tax not having decreased as much as expected, leading to a smaller budget deficit in 2020.
The State Budget for 2021 "provided for a wide range of measures to prepare for the economic recovery phase, highlighting the lowering of VAT on electricity, lower personal income tax withholdings and strong growth in public investment," he said.
João Leão said that public investment in Portugal in 2021 would grow by 24%, the third highest growth rate in the euro zone, only surpassed by that of Slovenia and Greece. On average, investment in the single currency countries will grow by 9%.
Thus, in public works, the Central and Local Administration and public companies launched a number of works to maintain economic activity, the Minister compared the tenders promoted in the first half of 2019 with those in the first half of 2020, and there was an increase of 35%.
