The main problem at the socio-economic level has to do with the particular reality of the families and people most in need, rather than the average reality of society. After the government granted support of 125 euros in October for non-pensioners with incomes of up to 2,700 euros gross per month, in order to help mitigate the effects of rising prices, there has been a lot of discussion around the most recent support of 240 euros aimed at families receiving minimum benefits or benefiting from the social electricity tariff. When, in Spain, Pedro Sánchez announced the third package of measures to support families in order to mitigate the negative impact of inflation on their purchasing power, the elimination of VAT on basic foodstuffs - such as bread, milk, cheese, eggs, fruit, vegetables and pulses, potatoes and cereals - from 4% to 0% immediately led to a thickening of the debate about what would be the most effective way to support families: whether through extraordinary support or by lowering VAT. Well, the answer isn't easy and depends on several factors: first of all, lower VAT may not necessarily mean lower prices. In this sense, the action of companies is crucial: if they raise their margins on the unit cost of these products, they can mitigate or even eliminate the effect of lowering VAT, so that this measure does not result in an effective improvement in purchasing power for families, but only in a loss of tax revenue for the state (and an imbalance in public accounts). The truth is that the Portuguese government has been consistent in its support for the neediest families, just as it was during the Covid-19 pandemic, and it is therefore important to debunk some of the demagoguery or illusions surrounding the uncompromising defense of the measure applied in Spain. PUB . READ ON The Portuguese economy grew by 6.8% in 2022 and forecasts for 2023 also point in that direction. Therefore, a growth of 1.5% in GDP per capita in real terms means that income per person will, on average, increase by 1.5%, which means that the main problem at socio-economic level has to do with the more specific reality of the families and people most in need, rather than the average reality of society. Therefore, it is more pertinent to act on the individual reality of families and people and not in average terms. On the other hand, one-off grants help consumers to adjust their consumption patterns, but it is crucial that they are not too large, so as not to contradict monetary policy and boost inflation - which is the case with the grants given by the Portuguese government. Therefore, despite the possibility of the VAT cut having a positive effect on families' purchasing power, it is necessary to balance the objectivity of the support for families with its budgetary impact, and it is no coincidence that in 2022 Portugal ended up growing more than Spain and the same is expected this year. The rise in the minimum wage to 760 euros in 2023 also consolidates the effective nature of the government's policy for families. However, the evolution of the average wage will necessarily have to accompany this rise, along with more social action and more affordable housing. At least, that's what a young person like me is looking forward to in the new year. Tiago Ricardo Economics student at ISEG, Lisbon School of Economics & Management, and member of the Socialist Youth Studies Office. Tiago Ricardo