Lisbon, July 3, 2025 (Lusa) - Portugal's prime minister warned on Thursday that the country will have to believe in "the absolute priority" that the government is giving to reforming the state if it wants excessive bureaucracy to stop being "a block to economic growth".
At the close of the Now channel's "Economy Without Borders" conference, held at a hotel in Lisbon, Luís Montenegro said he didn't want to make any concrete decisions yet, but asked the Portuguese to follow the government's “momentum” and not let themselves be influenced by the "spirit of the counter-reform reactions".
"We're going to start simplifying procedures, we're going to start eliminating phases that today are obstacles to the decision-making process in public administration, this will mean greater rigour, transparency and accountability, but it will also mean less prior control. That's exactly it, and it has to be said literally," he said.
At this point, Montenegro made a request to the Portuguese.
"The country has to believe in this. If the country truly wants state reform with results, it must believe in it. That doesn't mean it has to believe everything the government says, but it has to believe in the objective, in the assumption," he appealed.
The prime minister said that the country has to believe, for example, that the "excess of prior pronouncements, excess of prior opinions, excess of entities collaborating in the decision, that don't talk to each other, that talk only between papers, is objectively a block to the growth of the economy".
"And since it's blocking the growth of the economy, it's a constraint on paying better wages. And it's a constraint on retaining greater human resources, and better human resources," he emphasised.
Montenegro said that the government would be willing to debate "concrete solutions", but called for them to be discussed with an openness to change.
"Otherwise the country won't change, otherwise this will be another reform that will fall by the wayside," he said, emphasising that this would not mean "loss of supervisory capacity and accountability", but there would be less prior control.
Also in the field of corporate income tax, the prime minister asked the Portuguese not to let themselves be "frightened by repetitive but unsubstantiated considerations", sharing with the audience a reflection he said he had made on Wednesday, behind closed doors, at the social dialogue meeting.
Recalling that when the government proposed an across-the-board reduction in corporate income tax, the main criticism was that it would benefit large companies, an argument he contested, and that it would cut revenue, Montenegro called for waiting until the end of the year to assess "corporate income tax revenue".
"We've said several times that lowering the tax rate doesn't necessarily mean lower tax revenue (...) I want to see what it will look like in 2025. The tax rate has fallen by one percentage point. At the end of the year, we'll see if the tax revenue has decreased," he said, hinting that he had the opposite expectation.
Montenegro reiterated that the government intends to continue lowering IRC across the board until the end of the legislature, saying that he was willing to have the results of this strategy "scrutinised".
"Perhaps we have created the conditions for companies to invest more. To invest more in technology, in equipment, in infrastructure and also in human resources," he said.
In front of an audience of businesspeople and economists, the prime minister also repeated a message he has often given about the PSD/CDS-PP government's desire to valorise state employees.
"The public administration is a key element in the country's economic competitiveness, and it is also in the qualification of the public administration's resources that the valorisation of our competitiveness factors is played out," he said.
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