UTAO coordinator reduces the target public debt value to less than 100%

Coordinator of UTAO – Technical Budget Support Unit, Rui Baleras, in an interview with Conversa Capital – from Antena 1 and Jornal de Negócios – believes that at this point the desire to reduce debt to less than 100% of GDP is just a “symbolic step”. . “My objective.”

“The thing that stays on the resume because 100% or 99% is meaningless,” says the UTAO president.

Regarding how the value is achieved, that is, with the participation of public companies, he adds that only in the coming weeks will the non-recurring operations that were implemented to reach the declared value be known. However, he has no doubt that “public debt is still very high and that the next government must continue this effort to reduce debt.”

Rui Baleras believes that the budget surplus in the national accounting may exceed 1% of GDP, that is, exceeding the 0.8% estimated by the Antonio Costa government.

In an interview with Antena1 and Jornal de Negócios, he noted that this will be the first year since 1999 with four quarters with a positive balance, which strengthens his conviction in the expected result. But Ruy Baleras believes that this budget surplus already has a destination and there may be nothing left, as the executive wanted, to create a fund for the post-reconstruction future.

He says: “If the budget framework law is adhered to, this surplus will be used to reduce public debt and transfer it to the Social Security Financial Stabilization Fund.” With data on the pension system's $5.4 billion balance released this week, Rui Baleras has already done the math.

On the other hand, Ruy Paleras believes that “creating a fund with the desired characteristics, which are not stipulated by law, entails the risk of creating a bag of money that does not fall within the state budget.” The head of the Technical Budget Support Unit constitutes a Portuguese public authority, which is a body affiliated with the Council of the Republic responsible for conducting studies and preparing technical working documents related to the general budget and financial management, and he spoke about the so-called Medina Fund. The Finance Minister defended the creation of a sovereign wealth fund to respond to future “worst-case scenarios.”

The UTAO Coordinator acknowledges that the budget surplus is achieved through excessive tax burden. However, he doesn't like to talk about the financial shock.

Ruy Baleras states that progressivism has gone too far on efficiency costs, and advocates a significant reduction in marginal tax rates, which may even reach 20%.

He adds, “Without making any calculations,” making cuts of 3% or 5% will not be enough, and he says that “it may be necessary to reduce tax rates by 20% all at once or over two years.” At the same time, he believes it will be necessary to “study the tax benefits with a fine comb.”

Regarding the high-speed train, he considers it a “very debatable” investment.

Ruy Baleras questions the feasibility of investing in high-speed train and the benefits to the economy due to the geography of the country, the investment that needs to be made, and the profitability in the future.

According to the person in charge, “the mere presence of community funds is not a reason to proceed with the work.”