The Portuguese Government submitted to Parliament a bill to revise the Budget Framework Law that aims to expand the possibilities for using public administration surpluses. The proposal opens the door to channeling positive fiscal results to new purposes that may be legislated in the future.
Current legislation determines that budget surpluses be preferably used for public debt repayment while the country exceeds the 60% of GDP limit established in European rules, and then for the creation of an anti-cyclical stabilization reserve. Social Security contributory system surpluses revert to the Social Security Financial Stabilization Fund.
With the Executive's proposal, references to "preferred" uses become "priority" uses, to which is added the possibility of creating new possible purposes for the surplus through future legislation.
The Government also proposes greater stability and predictability in the design of State budgets, intending that the expenditure limits set in the new medium-term frameworks constitute the basis for the following year's Budget.
