LISBON, Portugal -- Portugal's Parliament has approved unprecedented tax increases despite a broad public outcry and concerns that the latest austerity package will prolong the bailed-out country's recession.

The centre-right coalition government used its overall parliamentary majority to pass its 2013 budget Tuesday.

All opposition parties voted against the deficit-reduction measures which will cost most workers the equivalent of at least a month's income next year. Hundreds of people protested against the budget outside the parliament building in Lisbon.

Trade unions and business leaders complain the spending plan doesn't do enough to revive an economy that's headed into a third straight year of recession.

The government predicts an economic contraction of 1 per cent in 2013. The jobless rate, currently at 15.7 per cent, is seen climbing to a record 16.4 per cent.