Passos Coelho told those in attendance that “the cost of employment to companies still remains very high” and “this was perhaps the only important reform that we did not manage to complete in the fiscal domain in these four years” before stating this “represents an important objective in the years to come.”
The prime minister said that cutting the cost of labour to companies would also make the country more attractive to investment and that he was “convinced that we shall achieve this reform with the European Union in the years to come.”
Passos Coelho said that while not entirely out of the woods, the greatest threats facing the Eurozone had been dispelled and that the Portuguese economy had undergone a structural transformation.
The Social Democrat leader then pointed to how the country was no longer attracting investment based on low salary costs but rather for projects requiring qualifications and innovation “radically changing the economic profile of the country” with its greater focus on exports and creating value while balancing the state’s books.
The prime minister accepted that it might have been more popular to cut personal income tax than corporate tax but that the latter created the wealth and employment that were a prerequisite to any balanced cut in personal taxation.
In turn, speaking at the same event, Economy Minister António Pires de Lima highlighted how the government had formally closed negotiations over public and private partnership contracts.
“This was a good day because the cabinet approved the close of negotiations over PPP’s that represent total saving to Portuguese taxpayers of €2.02 billion already incorporated into the budgets for 2013, 2014 and 2015 but which have now been structurally incorporated into the Portuguese state,” said Pires de Lima.
The economy minister stressed the time and effort that had gone into re-negotiating the PPP’s for highway construction and management and that the government planned to advance with negotiations over a further eight contracts “which will mean annual savings of €300 million.”