Portugal's new centre right Prime Minister Luis Montenegro on Thursday announced income and corporate tax cuts to boost the economy in his first speech to parliament since taking office at the head of a government with no majority.

His Democratic Alliance party was the biggest party to come out of March 10 elections and Montenegro was sworn-in on April 2. It has no majority in parliament, however, after Montenegro refused to make an accord with the far-right Chega party.

Montenegro has ordered an income tax cut to the value of 1.5 billion euros and told parliament middle income earners would benefit most.

He announced that company taxes would be cut from 21 percent to 15 percent over three years.

The prime minister said he would reduced the time it takes the state to pay suppliers, speed up investment projects that use European Union funding and launch pay talks with teachers.

"The Portuguese people are demanding change," he said.

The government took over from the Socialist party that had ruled since 2015.

Montenegro's programme will only pass in parliament on Friday because of the abstention of the Socialists, who have 78 seats against 80 for the Democratic Alliance. Chega made a spectacular breakthrough in the March elections going from 12 seats to 50.

The Socialists have said they will oppose many of the government measures, posing an early threat to its stability.

"You want the Socialist Party to support a government that wants to change socialist policies. Nobody would understand that," said Socialist leader Pedro Nuno Santos in his response to the prime minister.

Santos has already warned that it will be "practically impossible" for his party to back the government's 2025 budget when it is proposed later this year.