PS leader José Luís Carneiro has gone on the attack today, accusing the government of “making money at the expense of citizens’ sacrifices”.
On a ‘walkabout’ in Benfica market (where he talked with stallholders about rising prices, and increasing difficulties), Mr Carneiro explained that if inflation rises by 1.5 percentage points, reaching 3.6% (which it may well do, in the current global context), the state stands to gain another €500 million – which, in his view, is “immoral”.
The PS secretary-general was quoting from a document, drawn up by one of his team. As he stressed, if inflation reached was allowed to affect prices across the board, the government could stand to increase its revenue by €1.6 billion (or 0.52% of GDP).
The PS focus, therefore, is on reducing taxation, so that the effects of inflation are reduced for consumers – and so that the government does not benefit from rising prices.
This far, the government has balked at returning to the ‘IVA Zero’ (Zero VAT) solution, offered during the last energy crisis on essential food items. This was a mistake, insists Carneiro, whose party will be back in parliament on Friday calling once again for IVA Zero, and other measures to reduce the cost of living for everyday citizens.
Powering the Socialists’ campaign are the measures introduced in Spain, where ‘everything’ has been made cheaper in a €5 billion package that has once again elevated the country’s prime minister in the eyes of many.
As Carneiro said today, flanked by party members: “The measures that the government has adopted (up until now) are patently insufficient, and the cost of living today is rising exponentially. Families are having serious problems facing this increase in the cost of living.”
Socialist goals, therefore, are: ‘IVA Zero’ on the essential food basket; a temporary reduction on the percentage of IVA levied on fuel and gas, from the current 23% to 13%; exemption of tax on agricultural fuel – and a new and improved package of measures for freight and passenger transport companies.
The party calculates that if these measures remained in place until the end of the year, they would have a net impact of 0.4% of GDP, which could be neatly covered by the ‘historic budgetary surplus’ that the government hadn’t expected last year…
We now have to wait until Friday to hear how the government responds to the PS ideas.
