Labour MPs say budget is ‘too optimistic’

Labour spokesperson for the economy and finance Karmenu Vella said the budget had not lived up to expectations and barely addressed fiscal consolidation, saying the trend of increasing debt was still continuing.

“This budget came up with small solutions for big problems. The programme should have been longer and required more serious measures to be included. Red tape and bureaucracy needed to be removed in order to address fiscal consolidation,” Vella said.

Vella said that the budget did not address the biggest problems addressed by families and business, mostly because of burdensome work conditions and housing.

“The budget seems to consist of quantity and not quality. But it is not about what is written, but about rather what is implemented,” Vella said.

Vella said the government had good plans written in the budget, but few were actually implemented such as projected capital expenditure which by September was still at €180 million when it should have been €450 million.

When asked how the Labour Party was expected to lower electricity and water bills as Opposition leader Joseph Muscat pledged he woould do, Vella said Labour would fulfil its promise. “We want to reduce the bills with oil cost reductions. The PN does not want to and did not when the cost of oil went down. Gonzi had said that the bills could not be reduced because the cost of oil had increase,d but the cost of oil had gone down before and the bills were not reduced. The PN should have listened to the PL and should not have opted for more expensive heavy fuel for the power station,” Vella said.

Vella was also asked to at least give estimates of by how much bills will be reduced.

“The Prime Minister yesterday was asked what he planned to do in coming months but his response was that it was impossible to predict what will be done in three months. Now this is the Prime Minister who has all the papers available to him. How are we expected to answer what we plan to do in 12 months or more to reduce bills when the Prime Minister cannot even answer a question about the next three months?” Vella said.  

Labour MP Charles Mangion said the budget was “too optimistic” and figures show great differences over the past four years of the forecasted and actual amounts in expenditure, deficit, debt and revenue. Instead of seeing the reality of the situation when it comes to revenue, Mangion said that the government always refers to the international situation.

Referring to fund entitlements from the EU, Mangion said that the budget did not mention anything regarding how much Malta was entitled to in EU monies.

Looking at the average weekly wage for employees, Mangion pointed out that the supposed amounts were not reflecting the real wages being earned and is actually going down. “The government is boasting about all these measures being taken to increase to help middle class families but the reality of how the workers’ purchasing power is being affected by the increasing taxes shows that workers will never be at the same level as they were in 2009 which show the highest figures,” Mangion said.

Vella said debt was the “biggest headache” faced by the country and needed to be reduced. “What is alarming is that debt is increasing at a larger and faster rate than the GDP. In 2010, Gonzi promised that debt was going to go down to €3368 million whereas in fact it went up to €4200 million,” Vella said.

Vella also pointed out that Malta also has the one of the lowest rates of total employment of the 16 to 64 year age group, the lowest rate of female employment and second to lowest rate of employment of 55 to 64 year olds, despite government's claims of having one of the lowest levels of unemployment in Europe.

New income tax measures were included in the budget but Vella said that no figures were presented to show how many families will actually be able to benefit from such measures. “Apart from this, the varying calculations of the tax bands for single, married and parent vary  greatly and the parent income tax computation is much less than for married individuals which means it is not worth it to declare themselves parents,” Vella pointed out.