PES heaps praise on Joseph Muscat for ‘turning country’s economy around in four years’

The Party of European Socialists (PES) yesterday heaped praise on Prime Minister Joseph Muscat for having “turned the country’s economy around in just four years while also implementing unprecedented social measures”.

The PES was referring to Dr Muscat’s announcement on Thursday that the government’s Consolidated Fund registered a surplus of €8.9 million, the first time in 36 years in which a surplus had been registered.

In 2012 and before, Malta was subject to an excessive deficit procedure, the PES noted, but by 2016 it had achieved a fiscal surplus for the first time in 36 years.

“At the same time, Malta’s Labour government has greatly strengthened social measures. This paved the way for economic success by empowering citizens to be able to go out and work, and by giving fiscal incentives to businesses that in turn created further job opportunities.”

PES president Sergei Stanishev said, “The success of the Maltese government programme should be not only a model for other social democratic governments, but for every European country.

“Progressive parties always insist on a strong social agenda. When we manage to combine this also with strong economic growth, like in Malta, the result is success not only for the country, but for the entire PES family.

“I am very happy that the Maltese government is also working hard on our European Youth Plan, providing job opportunities for young people and recently implementing the Culture Cheque to provide young people with free access to culture. This is an investment in the future of the European project.

“Joseph Muscat is achieving both economic and social success. His government has put Malta’s economy on solid foundations, creating quality jobs and helping the parts of society which need it most.”

The National Statistics Office on Thursday published figure showing that Government’s Consolidated Fund registered a surplus of €8.9 million.

Compared to 2015, recurrent revenue registered an increase of €172.2 million whereas total expenditure went down by €72.5 million. This resulted in a positive change in the Government’s Consolidated Fund by €244.7 million.

Compared to 2015, total expenditure stood at €3,798.1 million down from €3,870.6 million, mainly as result of lower spending on capital expenditure and interest component which outweighed added outlays on recurrent expenditure.

Addressing a press conference on the subject on Thursday, Prime Minister Joseph Muscat expressed pride with the government’s ability to turn a budget deficit of €362 million from the year 2012 to a registered surplus of €8.9 million.

Dr Muscat said that Malta had been humiliated for reaching excessive deficit in 2003, 2008 and again in 2012, after the EU had warned it to tread carefully with Malta’s deficit.

“We will no longer allow future generations to inherit debt,” he said.

Dr Muscat also said that it would have been easier for the government to register such a positive statistic by cutting free childcare, cutting government-funded medicine stocks, cutting pensions and increasing tax.

He said that the EU had encouraged austerity measures, a fiscal strategy that seeks to cut government spending and increase taxes in order to get public finances in line.

That translates into cutting expenditure on infrastructure, social services, pensions and benefits in order to help balance the public coffers.

“We didn’t do it this way, which is why I’m calling the current situation an economic miracle. Taxes have been reduced for all, while we have worked on increasing tapering benefits and increasing the income of the lowest earners. We have made this achievement without being cruel to the people”.

He cautioned against a laissezfaire attitude of over spending, and in order to foster sustainable development.

“The priorities are to continue delivering on the electoral manifesto, meeting Malta’s needs and addressing the crumbling infrastructure. The next step is to embark on major infrastructural projects which the country so badly needs,” said Dr Muscat.

“These are not just statistics, these are difference in the lives of the people. A surplus means less pressure to increase taxes, less pressure to cut social services. With the current figures we can focus on projects such as innovative mass transportation,” he added.