[WATCH] Budget 2016 ‘proof of a government with a plan’

Budget 2016 ‘proof of a government with a plan’ • Video by Ray Attard

The measures listed in Budget 2016 was “proof of a government with a plan”, according to Prime Minister Joseph Muscat.

In a press conference right after the budget presentation, Muscat said the Labour’s roadmap unveiled in the 2013 election campaign was bearing fruit.

“We are not keen on presenting shocks but a clear plan with a strategy,” he said, adding that the government had once again confirmed the energy tariffs reduction had resulted in €80 million in people’s pockets.

The effective measures cost some €24 million.

He said the income tax cuts have now reached all pockets of society.

“We are encouraging hard workers whilst helping the vulnerable,” he said, referring to the increase in minimum pensions. 12,000 pensioners who will be pulled out of the poverty trap or helping them as not to reach the poverty line.

He listed the in-work benefits extended to those where only one parent could work.

“This budget reflects social justice and an environmental conscience. We are the first government to address derelict properties. It is unacceptable to have huge empty buildings whilst there is demand to build more,” he said.

The environment contribution – whereby tourists will pay €0.50c tax, capped at €5, will help with the upkeep of several areas.

Muscat said the government was discussing with hoteliers on how to collect the contribution. Irrespective of the nationality, everyone must pay their stay and the country could not discriminate with tourists, he said.

“If we want to invest in our infrastructure, there is a price to pay. It won’t come from the Maltese who go to Gozo or stay at a hotel but through the two million tourists who come to Malta.”

“We launched new ideas to attract private investment,” he said, referring to the planned project for St Elmo while helping SMEs – by reducing the performance guarantee – to tender for public tenders.

An increase of 30% to target road works; the new campus for the Institute for Tourism Studies at Smart City is a reflection of the government’s will to improve tourism services.

Muscat said that, with an increasingly ageing population, the government was planning for the future challenges in health. To target waiting lists for elderly residences, the government will launch a pilot project to encourage more families to employ carers for elderly in the community. The plan is for the government to pay up to half of the minimum wage.

Deputy prime minister Louis Grech said when analysing the budget, the government had presented “a balanced budget” which incentivised free market while distributing the wealth created.

“The budget, while we proved our strength in reducing the deficit, we are also helping the weak and reaching out to all,” Grech said. “The social dimension is extremely important for us”.

Grech said each budget built on the previous one, and part of a five-year strategy. “It is a credible budget in the country’s economic strength.”

Finance Minister Edward Scicluna said he was “happy” to form part of an administration that understood the importance of a solid fiscal strategy.

“The budget is not just about consolidating books but also about changing direction,” he said.

Asked about fuel prices, Muscat said the Labour’s policy was to create stability and avoid shocks from one month to another. “Our policy ensures stability and reductions. Families and businesses are currently enjoying prices reduced at a time when other countries had increased the prices,” he said.

On the planned roadworks at Kappara and Marsa junctions, Muscat said it was not an easy project but it was necessary. At the same time, Transport Malta was looking at which works could be carried out during the night.

“It will be a huge challenge of project management and it will create inconvenience; at the same time it needs to be done for the long-term benefit,” he said.

Muscat reiterated the feasibility study on the construction of a tunnel between Malta and Gozo – penned by Gordon Cordina – will be published.

The financial estimates show that the public sector borrowing requirement for next year will be of €736 million, when the projected PSBR for this year was of €574 million. At the same time, the capital expenditure is expected to go down to €370 million next year.

Asked whether this reflected a higher cost of his government, Muscat said that his reading was different.

“We have deficit which has gone down to 1.1%, reflecting less debt. The percentage of debt to GDP is going down to 65%,” he said.

The publication will excluded commercially sensitive information affecting the Gozo Channel.

The next step will be an ecological and geological study.