[WATCH] PN and PL proposals ignoring Malta’s financial reality - AD

Alternattiva Demokratika chairman Michael Brigulgio said that both the Nationalist Party and the Labour Party are being "irresponsible" by "promising everything to everyone without keeping the financial impact in mind."

He pointed to the Nationalist Party's pledge to carry out the Malta-Gozo tunnel, as well as the Labour Party's 'cheaper bills' energy proposals as prime examples of "a feast of Christmas proposals."

He said that the parties are delivering such promises despite how official figures show that Malta's finances are in dire straits. "The national debt is growing, as well as the debt of corporations like Enemalta."

 "According to the latest NSO figures, for 11 months to November 2012, show that government's deficit was EUR64 million times higher than the relative 2011 figure," Briguglio said.

"Yet the government predicted that by the end of 2012, Malta will be EUR40 million better than in 2011, which means that, if revenue levels are similar to that of 2011, a net improvement of EUR 104 million is required for December 2011."

He added that the 2013 budget is expecting a revenue increase of EUR 83 million revenue, from EUR 840 million in 2012 to 923 million in EUR 2013.

However, he pointed out that this is not realistic "when the same budget is proposing an income tax cut for those earning between EUR 19,500 and EUR 60,000, down from 35 per cent in 2013 to 25 per cent in 2015."

"For such an increase in revenue to take place, the economy must grow at a rate that goes beyond recent trends and which is beyond belief given the global economic crisis," he insisted.

Briguglio warned that the proposed tax cut will mean that Malta will have to make good for the tax cut's impact on public finances, and the shortfall in government revenue, "through a reduction of public services, more borrowing, or compensating tax elsewhere."

Briguglio also hit out at the proposed tax cut, saying that it "lacks a social justice dimension". He added that such a deduction was "regressive" as they are of no benefit to the vast majority of workers who are earning less than EUR 19,500,

He said that AD is committed to a progressive income tax system, "based on ethical considerations that those who can contribute proportionally more do so."

Briguglio also said that AD supports schemes that keep VAT low on products and services that account for a higher proportion of spending by low-income earners.

"Property-speculation should be taxed from third vacant property onwards, particularly when Malta is a perpetual building site and when a quarter of properties are vacant."

Briguglio also reiterated AD's position regarding an increase in minimum wage, and that it should be extended to part-time and contractual workers.

Regarding the Gozo-Malta tunnel project recently endorsed by the Nationalist Party, Briguglio said that while it remains to be seen whether Malta will be able to obtain EU funding for the project, there are bigger priorities for the country.

 "If we obtain EU funding for the tunnel, it will mean a loss of financing for other things, given that Malta receives a net financial package."

He added that a large source of EU funding for Gozo-related projects stemmed from Gozo's double isolation, or insularity, status. "If we build this tunnel, Gozo could lose out on funding in other areas."

He questioned whether the tunnel is a national priority, insisting that other social and environmental issues for both Malta and Gozo are more pressing, suggesting that other less expensive options be considered for increasing access to Gozo, such as sea-craft.

Asked about what should Malta's priorities should be, particularly in EU funding negotiations, Brigulgio said that Malta's priorities lie in addressing its poor social performance in area such as family friendly measures and ensuring a work-life balance.

He said that another priority should be renewable energy, given that " we are last in the EU... and only 1% of Malta's energy generation stems from renewable energy."

Asked by NET TV journalists about budget proposals aimed at supporting lower income families, such as the Children's' Allowance and an initiative providing a financial incentive for workers to receive training.

Briguglio said that while AD always welcomed positive measures such as the Children's' Allowance, he however expressed doubt about the workers' training scheme.

He said that given that most minimum wage and lower-income earners often have to work part-time at a second job to make ends meet, they would not have time for such training.

"We agree with active labour measures, but not measures that place a yoke on one's shoulders - these should incentivise people to work more...the budget's net balance is a regressive one."