Watching the quality of bank credit, directing support to the most vulnerable and ending support measures for energy are some of the recommendations the OECD made on Thursday to Portugal to improve its economic situation.
The OECD recommends improving the macroeconomic and fiscal policy of the country, strengthening employment and productivity, and improving the health system and the transition to a green economy, according to a report on the economic performance of Portugal facing current global and domestic challenges.
To achieve these goals, the Paris-based organisation considers that the country should tighten “the fiscal policy stance, including by increasingly directing budget support to the most vulnerable families and gradually eliminating energy support measures.”
Portugal should also continue to reduce public debt, developing a medium-term strategy to improve the structure and efficiency of public spending and carrying out systematic and regular reviews of public spending, including in the health sector, to rationalise public spending and improve its efficiency.
Recommendations to improve economic policy also include launching new accounting standards and developing performance budgeting, and reducing tax expenditures, “especially those that do not target low-income households or substantially increase compliance costs.”
Despite praise for Portugal’s improved banking, the OECD recommends “closely monitoring the quality of bank credit and the impact of measures to reduce the cost of service for lower-income households.”
Warning about the dispersion of support programmes for lower-income families, it recommends their consolidation and the “permanent expansion of social protection for non-standard workers.”
On the transition to a green economy, it also recommends a gradual increase in environmental taxes for sectors outside the EU Emissions Trading System (ETS), including excise duties on fuels and accelerating the modernisation and renovation of buildings.
The OECD wants the Portuguese government to increase investment and remuneration in the national health service (SNS), recommending multi-year budgets and that the focus on the network of primary care providers is a growing priority, it was released today.
In the report on Portugal’s economic performance in the face of current global and domestic challenges, the OECD criticised the current state of the health sector and issued recommendations.
“Investment spending and remuneration in the health sector will have to increase. Waiting times are long, with complementary private insurance giving higher income families better access to private providers,” it can be read.
The Paris-based organisation believes that “previous underinvestment in buildings and equipment is slowly being corrected” but warns that “it will take time to be fully overcome”.
“Long working hours and low salaries in the public sector have made it increasingly difficult to attract and retain medical staff,” it says.
For the OECD, it is necessary to “produce multi-year budgets for the SNS, balancing medium-term health priorities with available budgetary space.”
Among the recommendations are also the need for the country to have integrated care between hospitals and the primary care network, considering it essential that this becomes a “growing priority”.
The report also recommends that it should be ensured that all patients have a family doctor.
In the report on Portugal’s economic performance, the OECD recommends improving the country’s macroeconomic and fiscal policy, strengthening employment and productivity, the health system and the transition to a green economy.
The OECD also recommended that Portugal reduce employer social security contributions for low-paid workers to mitigate the impact of rising labour costs.
The organisation considers that the minimum wage as a proportion of the average wage is among the highest in the OECD, and the expected increases will further increase labour costs, so it recommends monitoring the impact of the minimum wage on employment.
In this context, it also recommends “reducing employers’ social security contributions for low-paid workers to mitigate the impact of labour cost increases”.
A greater “balance of protection between types of contract, continuing efforts to promote the use of permanent contracts” and the demand and supply of qualifications with the current and future needs of the labour market is another of the recommendations to the country.
The OECD also wants Portugal to strengthen active labour market policies aimed at small businesses, such as pre-selection programmes for job vacancies through public employment agencies.
The OECD also wants the reduction of entry barriers in the labour market, a continuation of efforts to prevent and combat corruption and the introduction of a permanent lobby register.
(Ânia Ataíde, edited by Cristina Cardoso – Lusa.pt)
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