Lisbon, Sept. 5, 2024 (Lusa) - Former Portuguese president Cavaco Silva on Thursday criticised the left-wing parties for, due to a "lack of information" about public finances, penalising lower-income Portuguese in particular by approving the end of road tolls on the ex-SCUT motorways in the interior of the country and the Algarve.
"I don't want to believe that, in a surrender to populism, the left-wing parties approved the elimination of tolls thinking that what mattered politically was the popularity of the measure, since people didn't realise the injustice that accompanied it. I do believe that they did so because of a lack of information," says the former head of state in an opinion article published today in the Público newspaper.
For the former prime minister, "the economic advisors of the respective parliamentary groups had an obligation to know about the existence of the budgetary restriction and to draw the attention of the parliamentarians to it, so that their decisions would be more in line with their ideology".
Recalling that "there are no free lunches", Aníbal Cavaco Silva warned that "the loss of revenue of many millions of euros" resulting from the approval of the elimination of tolls on seven motorways in the interior of the country and on the Via do Infante in the Algarve will "inevitably be accompanied by more taxes or a reduction in public spending".
However, he points out, "in net terms - the difference between gains and losses - the clear losers are the non-users of the motorways in question, especially the Portuguese who don't own a car".
Faced with this "obvious conclusion that the elimination of tolls is a regressive measure", i.e. "it is the low-income groups that proportionally lose the most", Cavaco Silva emphasises that "their level of well-being would be higher if the measure had not been taken".
For the former prime minister and president, it is therefore "surprising" that the elimination of tolls was so "enthusiastically approved" in parliament by members of the left-wing parties, "supposedly defenders of low-income groups".
"These parties didn't even bother to make use of the possibility of limiting the elimination of tolls to permanent residents of inland regions, which would mitigate the regressiveness of the measure," he notes, adding that "they went so far as to include the Algarve motorway, the Via do Infante, where a simple analysis of the number and type of its users shows the high degree of regressiveness of the measure."
For Cavaco Silva, this case shows how "in order to improve the quality of analyses and political decisions on budgetary policy, it is useful to know some important concepts of Public Finance Theory".
"In this way," he stresses, "we can avoid decisions that increase inequality among the Portuguese, penalising those on lower incomes in particular".
On 23 July, the country's president, Marcelo Rebelo de Sousa, promulgated seven decrees of parliament on personal income tax, including rate reductions, VAT on electricity and the elimination of tolls on seven motorways in the interior of the country and on the Via do Infante in the Algarve, with five of the decrees approved by the opposition, with the PSD and CDS-PP voting against.
In a note published on the official website of the Presidency of the Republic, Marcelo Rebelo de Sousa said that these decrees "have in common a financial dimension with an impact on state revenues" and "all decrees will have to find coverage in the state budget for 2025 in order to be implemented".
The measure to eliminate tolls was approved in parliament in June, with the aim of ending tolls on the A4 - Transmontana and Marão Tunnel, A13 and A13-1 - Pinhal Interior, A22 - Algarve, A23 - Beira Interior, A24 - Interior Norte, A25 - Beiras Litoral and Alta and A28 - Minho on the stretches between Esposende and Antas and between Neiva and Darque from 1 January 2025.
According to the Socialist Party (PS), which led to this measure being approved in parliament, the budget impact is €157 million.
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