Clyde Caruana budget speech: ‘Labour’s socialist heart still beating’

Finance minister Clyde Caruana unveiled his second Budget in a climate of unprecented challenges which, he said, had compressed decades of calamities into just three years.

Under the banner of ‘Certainty and Stability’, the Abela administration’s first budget of the legislature – the third under Abela’s tenure – Caruana pledged that the Maltese economy would stand firm and even generate wealth against the backdrop of war in Ukraine, the explosion in fuel prices and energy costs in Europe, the post-pandemic supply chain crisis.

“We were not afraid of these great challenges and we will certainly not be afraid of the future. Despite the negativity and fear, we are still on our feet,” Caruana said, paying tribute to Malta’s history of resilience.

He said Malta had not chosen the course to place more burdens on its people in the shadow of war in Ukraine. “Once again European countries have chosen to put eocnomic burdens on people... Other countries did not have the capacity to meet these challenges, so they turned to businesses and families. But the Labour Government did not do so.”

Caruana said Malta was the only country in Europe to have opposed higher bills for users, and where fuel and electricity costs had not risen. “We took this step from the first day that faced this challenge.. I appreciate that politically such a decision is tough and risky, but I strongly believe this is the wise decision.”

Caruana said Malta’s economy had collapsed when a Nationalist administration had increased energy bills, saying the rising bills in 2008 had actually increased Enemalta’s revenue by €100 million. “They collected €100 million more from people’s pockets... today the blow is six times what it was, and we are not asking for one single euro from the people.”

Caruana accused the Opposition of a legacy of having “broken the economy and burdened the people.”

“With this example, tonight people will come to a conclusion that Labour is capable and credible to manage the country’s economy and finances – you are not,” he said.

“We all know it took years to get the economy back on its feet. We saw families suffering. We saw businesses close. We saw great protests in the streets. We saw great instability. Total investment paralysis for years.”

Caruana said the measures to prevent energy price increases were preventing bills from doubling from €500 every quarter to €1,200. “The effects for an island, such as Malta, which is already affected by external inflation, would have been catastrophic.”

Caruana also took to task critics whom he said used populist arguments to claim there were magic wands with which to solve the country’s problems. “Populism does not tell people the truth, and history has always sidelined these people. Even those who gained power in the United States and Europe, are politically collapsing... families, in the silence of their homes, want politicians to protect families and businesses from the increase in energy prices.”

Caruana outlined what he said were the five principles that had guided Labour’s budget: socialism, which he said would protect low-income households; economic stability, to protect businesses against rising inflation; Malta’s LNG policy, whose price is linked to oil and had increased less than gas; a strong fiscal position; and Labour’s track record.

“This government knows what it is doing. You know where we stand. We say things as they are, without any hesitation. This budget tells it, black on white... we’re able to go against the current.”