Budget approved, Muscat underlines Malta’s sound banking sector

The 2013 Budget was approved this evening, with both sides of the House voting for the budget.

The deputy Speaker Censu Galea read out over 60 seperate votes for the budget estimates of all ministries, which were unanimously approved, effectively approving the 2013 Budget which had been presented by the previous administration in November 2012.

Speaking just before the vote, Prime Minister Joseph Muscat said that the 2013 Budget debate showed that Parliament was "flexible and confirmed that it can deliver."

He said the EU's monitoring report on Malta's economy showed that the Maltese government was burdened with substantial debts incurred by government agencies and noted that the government was committed to address the situation.

Stressing that the size of the financial services sector in Malta does not pose any risks since the Maltese banks are not exposed to the international turbulence, Muscat said:  "What we can all agree on, however, is that the report concludes that the country's banking system is on a sound footing and dispels what was claimed by some quarters in the international press."

Finance Minister Edward Scicluna said that despite suffering a historic defeat at the polls, the Opposition was in denial and denied claims that government revised its actual deficit figures.

While denying that Enemalta's €66 million in unpaid duties played no part in the one percentage point increase in the deficit as these were included in the government figures, Scicluna stressed that the "Finance Ministry did not make any phone calls to the National Statistics Office to change any figures."

He added that the figures were drawn up by the same persons who worked under the previous administration.

The government and opposition had already agreed that the budget retains its framework except for one measure: ensuring that minimum wage earners will not be taxed when receiving bonus.

In December, the then Labour Opposition had voted against Budget despite agreeing with the measures announced by former finance minister Tonio Fenech. It however had pledged that it would be presenting the same budget if elected to government.

The Budget was not approved after former PN MP Franco Debono's voted against it together with the opposition.

Debono's No vote followed months of internal strife within both PN and government.

During the first four months of the year, in the absence of an approved budget, the government's recurrent expenditure was limited to one-third of its €2.7 billion spent in 2012.

With 2013's budget not approved, a mechanism within the Constitution allowed ministries to spend up to 33% of the 2012 spend, up until the elections.