Muscat sets up defence of ‘realistic’ €732 electoral programme

Labour leader Joseph Muscat says the Nationalist government will not be able to balance its budget by 2017, and instead claimed a new Labour government will reach a deficit of 0.5% of GDP by 2017 with its electoral programme.

In a defence of his "realistic" costing of the Labour electoral programme, Muscat played down claims that his party's proposals were not as ambitious as the Nationalists' programme.

"The Nationalist government's proposed measures will reach spending levels of €1.1 billion that are over and above its current spending levels, while Labour's realistic roadmap is costed at €732 million," Muscat said in a press conference that was meant to explain the party's economic model for its electoral programme.

"The Nationalists will either break the bank or get in cash from new taxes... on the other hand we are offering a realistic roadmap of what we are going to deliver."

Muscat claimed that European Commission and International Monetary Fund projections showed that the PN's programme was impossible to achieve, and that finance minister's claim that a balanced budget was possible by 2017 was not achievable.

"Tonio Fenech has missed targets on a year-by-year basis - he missed targets on growth projections, deficit and even debt, and we have seen a disproportionate amount of treasury bills being issued in the first eight weeks of the year."

Labour says it will cut the deficit down to 0.5% of gross domestic project by 2017 under its electoral programme.

"The Nationalist government will carry out a salami cut of 2% of government spending across the board, which would mean reducing €34 million from social services, €11 million on health, and €10 million on education. That's no joke," Muscat said.

"But if Lawrence Gonzi says he won't touch health, education and social services, then it means he must reduce spending by 5% form other areas - and the assumption that the government can simply generate savings by applying cuts without saying where these cuts will come from, is a hazardous guesstimate," Muscat said.

The Labour leader also said that the Nationalist programme commits 70% of some €450 million in capital expenditure, while the PL's programme commits 25% of the capital expenditure programme.

"Our capital projects, even those carried out in partnership with the private sector, cost €416 million over four years. The country already spends around €450 in capital expenditure every year. We are committing ourselves to spend 25% of that capital expenditure under our programme, but that leaves us with 75% over the next four years that we will use for capital projects as is needed. The PN on the other has reduced its flexibility by committing itself to spending 70% and has leeway of just 30% from that kitty to spend on additional projects."

Muscat also said reducing government induced costs and cutting on bureaucracy would create a direct contribution to the economy. "These costs are major flaws in the Maltese economy as has already been highlighted by Standard & Poor's credit rating agency in its latest report."