Budget 2014 ‘showcase of a government with a plan’ – PM

Budget 2014 was a showcase of a government with a plan and a strategy which surprised those who didn't believe in a Labour government's promises of action, Prime Minister Joseph Muscat declared.

Addressing the press right after the presentation of Budget 2014 to the House of Representatives, Muscat hailed Labour's first official budget as one which revealed "the roadmap concept".

"Much more needs to be done but this was the first step. And I am certain that both those who trusted us and those who didn't realised that we are a government with a plan," he said.

"It most certainly surprised those who thought that we will not stick to our promises. But unlike the Nationalists, we will not wait until the end of a five-year term to implement our electoral programme."

Muscat said he wanted families to know that the government was behind him over concerns that they couldn't keep up with the cost of living and felt burdened by problems caused through the health sector.

"Their concerns are not a perception but a reality. And we are here to tell you we are working on them," he said.

Themed a "stronger and fairer Malta", the budget aspired to 'make work pay' by rewarding hardworking taxpayers, the middle class, and employers, Muscat said.

Echoing the finance minister's speech in parliament, Muscat reiterated that government had stuck to conservative financial estimates, projecting an economic growth of 1.7% when it could be higher.

"We prefer to err on the side of caution. We were very conservative in our estimates and we were very cautious," he said, adding that the government had asked the Auditor General to vet its financial estimates. The Auditor General's report has not yet been published.

Although the European Commission had yet to evaluate and issue a formal reaction to the Budget, Muscat said he felt confident that Brussels's reaction would be "positive".

The government projects a deficit reduction to 2.7% by the end of this year down to 2.1% next year, pulling Malta out of the Excessive Deficit Procedure.

Muscat reiterated there had been no introduction of new taxes and that next year's income from taxes would be €11.1 million lower than this year's. The government is expecting a €65.6 million revenue from indirect taxes.

From the Individual Investors Programme - set to generate €30 million in its first year in 2014 - the government will be directing €15 million towards the budget and €15 million towards the national development fund.

"We are being very realistic in our projections," Muscat said, feeling confident that income from the IIP would not lose momentum in the following years. He however insisted that the end target of the citizenship scheme "was not income but the talent and networking which we will attract".

"I am convinced that despite the scaremongering, the scheme will be a success."

With the electoral promise of reduction of utility prices coming into force in March, Muscat said the government had proven that "Alice in Wonderland is not the millennium gimmick" - referring to the Opposition's dubbing on PL energy plan.

Muscat added that the government worked hard to make sure that everyone would benefit from the budget measures: minimum wage earners, middle class families and high income earners.

He hailed the implementation of the free childcare centres for all "a revolutionary measure which has surprised many".

Muscat said the government had allocated a 12% increase in the education budget while stipends would increase year after year.

He however expressed caution over health insisting that the government was not happy with the situation it inherited. The government, he said, had chosen to issue a white paper - to include "ambitious proposals" - because it wanted the public to be involved in the consultation process.

The Prime Minister described the budgetary measures targeting persons with disability as the most "close to [his] heart".