Positive statistics prove government is on the right track – Minister Edward Scicluna
Minister for Finance Edward Scicluna said yesterday that the positive statistics regarding the country’s deficit and national debt provide enough proof to support this budget and the government’s vision.
Professor Scicluna said that this fourth budget presented by him as minister was only part of a bigger plan by the government to improve the public’s standard of living.
As he was addressing Parliament, Professor Scicluna said that the government’s vision is to have every family in Malta and Gozo live with a decent standard of living, as much or better than the average EU citizen. He said that to achieve this, the government had to help the most vulnerable and this is the government’s vision.
“To achieve all this, we have to have a better economic growth than other countries. This is possible only through constant investment, both from abroad and locally. We have achieved good results so far but we are not satisfied.”
The minister said that investment means a larger capital investment, and this still needs to grow. Referring to the minimum wage, he said that the move by civil society is admirable but the comparison with Ireland’s minimum wage is not ideal. “If we want to compare ourselves with Ireland, then we can also compare the progress made by the two countries.”
Professor Scicluna said that the government’s challenge at the moment is filling in the amount of vacant places of work and that this requires the authorities to receive foreigners.
“To grumble on traffic or on construction is not enough. We have to address the issue of debt of our country. This is a burden which needs to be addressed.”
“We have won the election with the promise of decreasing the deficit and address the country’s debt. From 70%, Malta’s debt is now at almost 60%. This progress is proof enough of all the good we’re doing.”
The minister said that the government never treated poverty as a perception and the administration was never afraid of facing this challenge. However, he warned that it is not right to bend the facts and results shown in statistics. He said that Eurostat is clearly showing progress, significantly from the year 2014 onwards.
Professor Scicluna said that the Opposition’s criticism that this budget ignored the middle class is unfounded. He said that this is not true and insisted that the PN Opposition forgot that the middle class also includes a large number of pensioners.
On the sustainability of pensions, the Minister said that the government is ensuring that future generations need to be guaranteed that they will not fall into poverty once they become pensioners. “This government is proud to have introduced the third pillar pension with the ability for a pensioner to apply also for a private pension.”
The minister said he cannot understand why the Opposition keeps on saying that the national debt has increased, because numbers clearly show this is not the case. “In these last three years, the debt has been going down in a constant manner. Hopefully, national debt will drop to under 60% in the near future.”
On the deficit, the Minister said that this government has managed to reduce the deficit from 3.6% to a record rate of 0.7%.
Earlier, PN Deputy Leader Mario de Marco warned that the country cannot become dependent on oneoff economic events, such as the sale of passports and Enemalta shares.
Speaking in the debate on the financial estimates of the Finance Ministry, Dr de Marco noted that government expenditure had gone up from four per cent in 2012 to around eight per cent and questioned whether this increase was sustainable.
“These one-offs will not always be there and if our economy, even just one sector, slows down, the gap between expenditure and income will become more pronounced.”
Dr de Marco said that after listening to the PM’s speech last week one would have thought that the country’s economy before Labour was in a disastrous state. Back then, the world was facing the worst recession in decades. The price of oil was five times higher than it is today. Notwithstanding these facts, investment was brought in, the economy grew and jobs were created. The EC had praised our country for the way it had battled and triumphed over the recession. “I would have expected the PM to at least acknowledge the good work done before he became PM. Instead of thanking these people Dr Muscat made an attempt to rewrite history.”
Going into more detail on the economic scenario, the PN Deputy Leader and shadow Finance Minister said the government had overshot its financial estimates for the past four years with a total of €350 million. He also criticised the PL administration for reducing investment in infrastructure.
Turning to Air Malta, Dr de Marco urged the government to keep the Opposition and all stakeholders in the loop at all times and said that if a deal with Alitalia fails, the national airline will manage to strike a deal with someone else.
Next he spoke on the upcoming development projects in the Paceville area. Pointing out that this area had the largest concentration of five-star hotels he called for a coordinated plan, especially during the construction phase.
Dr de Marco sounded the alarm on export figures, which are still below 2012 levels.
He also pointed out that many value-added jobs were being taken up by foreign nationals. This was most evident in the iGaming and financial services sector.
In a newspaper interview, the Finance Minister had hinted that he disagreed that the minimum wage should be raised. He should state whether this was the case, which would mean that he was saying the opposite of what the Prime Minister was saying.
Dr de Marco said the traffic problem had been a long time coming and was partly the result of mentality. He said the measures mentioned in the budget were nowhere near a solution.
On energy tariffs, he said that since the government had managed to reduce energy prices irrespective of a new power station, it should reduce them even further when the power station becomes operational.
PN MP mentions rumours regarding a merger between Central Bank and MFSA
PN MP Kristy Debono said there are rumours that the Central Bank and the Malta Financial Services Authority will be merged. She warned that if this project is truly in the pipeline, it risks creating an unnecessary earthquake in the finance sector.
Dr Debono said that despite some positive measures, the Minister for Finance failed to mention which new sectors the government is willing to invest in to safeguard the growth of the economy in Malta.
She said that the effect of the Panama Papers is still being felt until this day in the finance sector. Dr Debono said that local banks are finding it hard to keep a healthy correspondence with international banks, all because of the Panama Papers scandal. “Our banks are losing their bargaining power with international banks,” she warned while speaking in Parliament this evening.
Referring to the gaming and banking sector, Dr Debono said that the government’s vision is at a stalemate.