Budget 2022: Caruana likens COVID to WWII – ‘we shone in our hardest moment’

Finance minister Clyde Caruana has paid tribute to Malta’s economic steadfastness, in a Budget speech that lauded the island’s resilience in the face of the COVID-19 pandemic.

Addressing the House of Representatives in his first Budget speech, the second after the pandemic that hit the world back in March 2020, Caruana lauded his government’s €1.5 billion spend to save jobs and hit out at critics.

“In other countries, there was an explosion in unemployment and businesses went bankrupt, but in our country we wanted to save people’s livelihoods. This is why the government spent €1.5 billion for workers to keep their jobs. This small country which the Opposition claims is besieged by darkness, has been a far greater example to bigger countries,” Caruana said.

“The Malta we want to bequeath to our children is the Malta that faced the pandemic – a social Malta, a hard-working Malta, and a fearless Malta. This was the inspiration behind this budget.”

Caruana likened Malta’s performance in the face of COVID-19 to the small island’s fortitude during the Second World War. “We shone in our hardest moment,” he said, paying tribute to national health service workers, both Maltese and foreign workers, volunteer workers and those who assisted neighbours in need, and workers “from all levels, from supermarket cashiers to the disciplined corps who worked in impossible situations... the country is proud of and grateful to you.”

Caruana gave a rundown of his headline figures, saying Malta’s rate of employment (20-64) for 2019 had been 76.8%, rising to 77.3% in the first quarter of 2021; the EU’s rate had fallen by 1.7 percentage points. Malta’s unemployment also fell to 3.2% in August 2021 compred to 3.6% in 2019, while the EU’s increased from 6.7% to 6.8%; and inactive population rates fell from 24.1% in 2019 to 23% in first-quarter 2021.

Malta is expecting to register a 11.1 deficit, a point less than what was previously expected back in April, but government debt is still manageable at 61.3% of GDP. By 2024, Caurana predicts a 2.9% deficit with debt growing slightly to 62.4%

Caruana said the island had managed the pandemic judiciously with a budget for health spending that was “limitless”.

“We said, ‘spend as much as is needed, because we’re saving lives’. I don’t think we can even appreciate what we have: even a simple COVID test, without one having any symptom, was free and delivered on demand. Even vaccinations were started here before anyeone else and we fared the best in all of Europe,” Caruana said.

Caruana also lauded Prime Minister Robert Abela, whom he served as chief of staff in the first year of the PM’s administration, as the prime minister who faced the hardest first 100 days in office. “Not only am I proud of having faced this challenge, but together we did a far better job than countries larger than us,” Caruana said.

“Had we not been steadfast or if we had fallen to the pressure of those who wanted to shut down the country, we would have spent a year and a half in lockdown. Had we taken the advice of those who told us that business aids were a waste of money, we would have had thousands out of a job. Had we done what the Nationalist government did ten years before, we’d have told you ‘what happened, happened’, we’d have left you to drown and sent you home with five lightbulbs” – a reference to Lawrence Gonzi’s response in the 2012 Budget that dealt with rising energy prices.