AD's State Reform: Slimming Down, Flexibilizing, and Privatizing Portugal's Government

With the announcement of the new government's structure, Luís Montenegro sends a clear message to the country: it's time to reform the state. The electoral program outlines the main lines of this reform.

João Pedro Domingos / PSD

The creation of a new Ministry for State Reform, to be led by Gonçalo Saraiva Matias, has raised high expectations about the intentions of Luís Montenegro's government regarding changes to the state.

A look at the AD's electoral program reveals some clues about the reforms the new minister will undertake. In a chapter titled 'Better State, Fighting Corruption', the measures to be implemented are outlined. Interestingly, many align with the major themes of Chega's discourse in recent years.

Key objectives include:

• Extinguishing observatories, foundations, and duplicated structures within the state.
• Empowering hospital administrations to compete with future PPPs and the private sector in health.
• Privatizing sectors not deemed essential in the state's business area.

Less state, better state

The guiding principle of the AD's state reform is to decentralize, hold accountable, and slim down. In Health and Education, the proposal is for public schools and hospitals to have the same management and budgetary autonomy as those under PPPs or association contracts, creating a level playing field between public and private provision.

Regarding public finances, the goal is to reorganize functions and eliminate useless observatories and duplicated structures, reviewing associated spending across the entire public administration.

The reform plan also includes anti-corruption measures, such as regulating lobbying, reducing conflicts of interest, criminalizing illicit enrichment, and reforming corruption prevention mechanisms.

In the state's business sector, the government plans to exit companies considered non-strategic, excluding entities like Caixa Geral de Depósitos, Águas de Portugal, RTP, and Companhia das Lezírias. The transport sector, notably TAP, is expected to be heavily affected by this new wave of privatizations.

A significant change in the budgetary process is also proposed, aiming to clearly define budget allocations for each ministry and service, ending the notorious budget holds that have led to unfulfilled government promises.

Despite aiming to slim down the state, the AD commits to valuing public administration careers, addressing the most dramatic shortages in essential professions and reinforcing medium-term human resources policies with autonomy in remuneration policies and strategic objectives.