Normal for government to have deficit in first quarter – Muscat

“It is normal for the government to record a deficit in the first quarter of the year, and the government will recover in the third or fourth quarter of the year,” Prime Minister Joseph Muscat said yesterday.

Speaking during his customary radio interview, Muscat said that one “must compare these figures to their equivalent last year” and said that certain people “make him laugh” when they try to make an analysis that does not take into consideration like with like.

Last Monday, the National Statistics Office released figures showing that the government has registered a €16.5 million deficit in the first quarter of this year.

Muscat said that whatever the Opposition or “so-called analysts” say, the government can take solace in the fact that people are “living better quality lives,” adding that the government will keep working to move people who are economically suffering into the ‘new middle class’ that has been created.

Asked about Malta’s position on Libya and the developing migration situation in the Mediterranean, Muscat said that Malta’s position was a ‘sensible’ one. Malta, he said, would continue to fulfil its international duties.

“If there are people sinking or at risk of dying in our waters, I will not let that happen; I am ready to defend them without compromise,” Muscat said.

However, he added that as part of its strategy, the Maltese government was helping the Libyan coast guard to intercept boats and take migrants back to Libya.

In certain situations, Malta had managed to find alternative solutions, he said, referring to a case where an NGO ship had picked up migrants near Tunisia. After being refused permission to dock in Italy, the ship turned to Malta for help. Muscat said that he had agreed to allow the NGO boat to dock as long as Italy took the equivalent number of migrants from the country - a proposal which Italy accepted.

Muscat said that although the NGO did not accept the arrangement and went to Lampedusa anyway, such negotiations fostered an element of good will between countries.

He said that this was advantageous to the country, explaining that right after the AFM had saved 60 migrants recently, a German NGO boat which had saved 65 migrants began moving towards Malta.

The European Commission and the German government contacted the Maltese government, knowing that it was not Malta’s responsibility to find a solution. When the government told Germany and the Commission that it was ready to help the NGO ship but that none of the migrants onboard should remain in Malta, they both almost instantly replied that they would take all of them, Muscat said.

At this point, he said, Malta told these two parties that they would like a signal that Malta’s work was being appreciated, which eventually resulted in the German government pledging to take half of the 60 migrants who had been rescued by the AFM.

Turning to recently published rating by the credit rating agency Fitch – which gave Malta an A+ rating and changed its outlook from stable to positive – Muscat said that these reports “reflect what Maltese people are experiencing.”

Muscat said that under a Labour government, quality of life had drastically improved.

“We have created a new middle class which is being sustained and which will improve,” Muscat said.

He said that the government had “inherited a generation which worried that its children would face more difficulties than it had, but that has now been reversed and parents feel like their children will be treated better than they were.”

Such reports, he said, were important to attract foreign investment.

International investors did not rely solely on the words of politicians, but checked what reputable and independent agencies are saying.

“Fitch has reported that Malta is doing well but things will get even better,” Muscat said.

On the financial services sector, Muscat said that despite the ‘assault’ mounted by certain people against this industry, the sector had registered a 10 per cent increase – something he described as ‘no joke’.

He said that this growth had been registered while other sectors also continued to grow, showing that there was no overdependence on this particular sector, which employs over 12,000 people. He said that he was pleased to hear that students enrolled on courses related to this sector were being offered employment contracts while they were still studying.

He said that this sector could be controversial in any country, and referred to recent news that German banking giant Deutsche Bank had to sack 18,000 people following directives against it due to money laundering shortcomings. He said that this is the situation of a developing and more controlling market, and noted that he was pleased with the work of the Malta Financial Services Authority as the regulator.

Turning to the recently unveiled rent laws, which have now made their way through the second reading phase in Parliament, Muscat said that work on the reform had been ongoing for two years – even before the White Paper was launched – and noted with satisfaction that it had been passed unanimously in Parliament.

He said that even those who were not content with the reform knew that it was a just one and a correct one.

Commenting about the State Advocate Bill, which also made its way through Parliament recently, Muscat said that this was a important reform which other governments should have carried out but never did.

He said that he could not understand why the Opposition had voted against it after insisting on its implementation. “They said that they did not agree with it because it lacked certain parts but, at the same time, said they wanted it implemented as soon as possible; coming up with the package that the Opposition wants takes time, but it will be a part of future reforms,” Muscat said.