PN’s electoral programme costed to zero deficit by 2016

Finance Minister Tonio Fenech made the PN's case today for its claim of keeping public finances on a sound footing, presenting costings to all its fiscal proposals.

In a detailed, itemized list of costings for the PN's electoral programme's proposals, Fenech - armed with graphs and bar charts - insisted that Malta would reach a balanced budget by 2015-2016.

"We will be on the way of creating a surplus by 2017, because this electoral programme's proposals are centred around the creation of economic growth. Using these conservative figures, we forecast a gross domestic product of €8.5 billion by 2017 while debt will stay constant at €4.5 billion, reducing the burden of our national debt on GDP," Fenech said.

Fenech ran through most of the proposals being presented in the PN's programme, amongst them putting 200 police officers out on the beat at a cost of €4 million a year, as well as an ambitious spending review to win 2% of efficiencies every year, tagged at €300 million over four years and €85 million to fight tax evasion.

The minister, who in December announced a tax cut for high-income earners over the forthcoming three years, said cutting income tax and inheritance tax would cost €60 million.

Other figures included an increased €35 million spend on university stipends over the next four years, and €107 million in social measures.

The PN's tablet giveaway to all primary and secondary students in state, church and private schools would cost €15.7 million, after getting €8 million from the EU in funds. Parents whose children attend private-independent schools would get tax credits doubled, an overall spend of €2 million, as part of €200 million programme for education over the next four years.

Energy benefits and similar fiscal measures would cost €182 million over the next four years, while Fenech also announced €60 million will be paid in compensation to those who private property had been publicly expropriated.

Fenech accused Labour of having no plan to create new jobs, adding that on the other hand the PN was putting forward a detailed plan which will result in the creation of 25,000 over five years.

Pressed to explain in which sectors these jobs would be created, Fenech said: "We will create new jobs in new sectors such as life sciences, gaming and aviation while creating other jobs in traditional sectors such as manufacturing and tourism. It is impossible to predict a precise number of jobs which could be created in each sector. However, we have a plan to incentives diverse sectors and we will take it year by year."

On the PN's decision to backtrack on it decision to tax persons on the minimum wage, the finance minister said the exercise would only cost the government €60,000 annually, adding that "unlike the Labour Party, the PN is not hard headed and has no interest in antagonising minimum wage earners."

Fenech added that a new PN government would conduct an expenditure review to identify areas where the government spending could be reduced. This would lead to a 2% reduction in government's recurrent expenditure, translating to yearly reductions between €60m and €90m.

"This is doable considering that the government's total expenditure reaches €3 billion," Fenech said, pointing out that this was done in the past and would not lead to a reduction of services or benefits.

On achieving a balanced budget by not later than 2016 and a surplus in the years to follow, Fenech said that although the government failed to fulfil similar pledges in 2007 due to the unexpected international financial meltdown, he was confident that this could be achieved if the government's good work in weathering the storm is maintained.