Lisbon, Nov. 19, 2025 (Lusa) - Despite warnings from the Portuguese Government about limited resources, the two largest opposition parties have submitted hundreds of proposed amendments to the draft 2026 state budget bill, some of which could be approved without the support of the governing coalition PSD and CDS-PP Parties.
On the day the draft 2026 state budget bill was submitted, finance minister, Joaquim Miranda Sarmento warned the opposition that the projected surplus is €230 million and that, if the country does not want to return to a deficit, the margin for incorporating new measures presented during the committee stage debates is "close to zero".
With the PSD and CDS-PP out of the running to approve opposition proposals, the simultaneous support of the far-right Chega Party and Socialist Party (PS) benches will be necessary to pass any amendments to the draft state budget bill at the committee stage process that begins this Thursday.
Last year, in a similar scenario, the two parties enabled a permanent increase in pensions against the executive's will. Earlier, outside the budget discussion, the PS's proposals to reduce VAT on electricity and exempt tolls on the former SCUT motorways were also approved in parliament.
This year, Chega and the PS have shown no signs of agreement, but they do have overlapping priorities. Even without a formal agreement, issues such as the increase in pensions or the end of tolls will at least mark the debate at the committee stage, and some proposals may be approved.
+++ Chega wants 1.5% increase in pensions, PS conditions increase +++
On pensions, Chega leader André Ventura called for a consensus among the three largest parties to enable a new permanent increase in pensions, proposing an additional 1.5% increase in pensions up to €1,567.50, beyond what is provided for by law.
Ventura said he did not mind if the parties followed his proposal, calling for responsibility on a matter of "national importance", but made it clear that he did not sympathise with the PS's solution, considering that it is "dependent" on certain scenarios.
In the previous budget discussion, Chega, through abstention, allowed the PS's proposal for an additional 1.25 percentage point increase in pensions to go ahead.
In this year, the Socialists announced a different proposal: they want any extraordinary supplement to be paid to pensioners in 2026 to be converted into a permanent increase, so that it counts towards the 2027 pension.
The PS says that the measure does not compromise the balance of public accounts and guarantees that its proposed amendments preserve the "budget surplus as presented by the Government". However, the prime minister has already considered that the socialist initiative is not adequately compensated from the point of view of financial sustainability.
In order for the proposal to be approved, given that the Social Democratic Party (PSD) does not agree with this initiative, the PS would have to secure the support of Chega - support that seems difficult to obtain, since, although Ventura's party advocates an increase in pensions, it has criticised the terms of the solution presented by the socialists.
Other parties have presented proposals on this matter, such as the Communists (PCP), which wants a permanent increase of 5%, not less than €75, and the Left Bloc, which proposes a minimum increase of €50 per pensioner.
The government's proposal, approved at the first reading debate and vote in parliament, provides for additional expenditure of around €700 million for pensioners, divided between permanent pension increases for all, following the legal formula for updating, and the reinforcement of the Solidarity Supplement for the Elderly (CSI).
The Economic and Social Council (CES) considers that the draft 2026 state budget bill should favour a "structural increase in pensions" rather than extraordinary support, stressing that the planned increase does not prevent the loss of purchasing power, in this body's opinion on the budget proposal.
+++ PS, more cautious than Chega, hopes to approve toll exemption +++
After the two largest opposition parties last year enabled the socialist initiative to end tolls on the former SCUT motorways - albeit in a legislative process prior to the state budget - Chega and PS are once again insisting on the elimination of tolls, again against the position of the Government, which has already said it opposes any end to tolls.
Chega is putting forward several proposals to exempt certain sections of motorways, but has also presented an initiative that provides for a phased plan to reduce and progressively eliminate tolls throughout the country in 2026.
The PS does not go that far, but proposes the exemption of tolls on the A6 motorway and on the sections of the A2 that serve the Alentejo for residents and companies based in the region - a proposal with an annual cost of 20.5 million, according to the party's calculations - and expects, said socialist Frederico Francisco to Lusa, that Chega, which proposes total exemption at national level, will be able to make this initiative viable.
The socialist bench also wants to temporarily suspend tolls for heavy goods vehicles on the A41, A19 and A8 while studies are carried out on congestion and future models for financing the road network.
+++ 0% VAT: Chega wants it now, PS links it to the end of the ISP discount +++
The two parties are putting forward proposals to exempt a range of essential goods from VAT, but in different ways, with Chega proposing that this zero rate on a basket of essential foodstuffs be applied as early as 2026, as a way of responding to "a general increase in the cost of living".
The Socialists, on the other hand, propose that the application of tax revenue from the elimination of the discount on the Tax on Petroleum and Energy Products (ISP) should be "subject to a decision by parliament", in a discussion that should prioritise channelling this money towards exempting a range of essential food items from VAT.
The Socialist Party believes that this relief should be applied in full to the reduction of VAT on essential foodstuffs, using the power conferred by the VAT Directive, which allows for the application of “super-reduced rates” (including zero rates)," the draft states.
Although the end of discounts on the Tax on Petroleum and Energy Products (ISP) is not provided for in the draft budget bill, the Government has already signalled that it intends to begin a gradual process to eliminate this benefit, in response to the recommendations of the European Commission.
This intention has even prompted criticism from Chega, which has made the issue one of its main banners in the budget debate. In the first reading debate and vote, André Ventura accused the executive of preparing a punitive increase in the ISP and stated that environmental taxes will rise by more than 4% in 2026, to which the prime minister responded by accusing the Chega leader of contaminating the debate with impositions from Brussels.
Montenegro clarified that the forecast increase in ISP revenue - around 4.6% - is only the result of an expected increase in consumption, distinguishing this estimate from the issue of the discount created in 2022, when fuel prices were higher.
+++ Relief on commissions: PS wants total exemption, Chega limits to 0.5% +++
Chega and PS also converge on proposals to relieve the commissions charged for early repayment (amortisation) of mortgage loans, albeit with initiatives of different scope.
The far-right party proposes, for next year, a single maximum rate of 0.5% on the amortised amount for the mortgage repayment commission for the purchase or construction of a permanent home.
Chega justifies this by arguing that loan amortisation represents, for banks, a "reduction in profit margins", but also a "decrease in the risk of default and an increase in the liquidity available to reinvest in new loans" and that the application of a single fee will "standardise the costs borne by families and promote greater predictability in the costs associated with credit management".
The PS bench goes further and wants to permanently exempt variable-rate mortgage repayments from fees.
+++ 1.6 million requested by the Constitutional Court brings PS and Chega to agreement +++
The issue would probably have been overlooked in the budget debate, but the president of the Constitutional Court, José João Abrantes, put the matter on the agenda with an unprecedented request for a hearing in parliament to ask for an increase in the budget allocation of around €1.6 million.
José João Abrantes told parliament that he wrote to the prime minister in August to alert him to the absolute need for an increase in the budget allocation, but Luís Montenegro only replied on 10 November and without giving any guarantees. On the day of the hearing, Minister António Leitão Amaro referred any possible budgetary changes to parliament.
With the government coalition PSD and CDS-PP parties opposing this increase, pointing to management failures, the PS and Chega, as well as the rest of the left, guaranteed that they would be available to form the necessary majority to enable the increase in the Ratton Palace allocation.
Although the debate took place outside the period for submitting proposals for amendments to the budget, Chega offered to amend an initiative already presented in order to include the funding, and socialist Pedro Delgado Alves said he was willing to approve this expenditure, recalling that, in the past, "in situations that deserved attention", no one had opposed budget changes after the deadline.
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