Government's budget plans based on 'yesterday's vision' - Tonio Fenech

The pre-budget document presented by finance minister Edward Scicluna this week lacks a concrete package of proposals to foster economic growth, Nationalist MP and former finance minister Tonio Fenech said.

"If this is the government's vision I am greatly concerned, because it is yesterday's vision," Fenech said.

The Opposition MP said that he expected the document to include a tangible set of proposals to substantiate the government's forecasts, especially in terms of job creation and economic growth.

"The only two concrete proposals are found in the government's plans to implement the tax cuts devised by the PN government and fiscal discipline, which Fenech said was imposed by the EU. 

The former finance minister added that the government's pre-budget document fails to outline the government's vision in job creation.

"I was surprised at the lack of depth in the document especially considering the delay in its publication," Fenech said, pointing out that under pervious administrations the document was traditionally published in July.

While criticising the document's lack of proposals, the former PN minister said that the official government document published this week by Scicluna was a sign of approval of the previous government's economic policies.

"The pre-budget document presented by the labour government, and not by the IMF or any other international body, also confirms that the previous government's policy addressing competitiveness was also successful," Fenech said.

He pointed out that despite the Labour Party's harsh criticism when it was in Opposition, the pre-budget document dispelled all previous doubts cast on wages, youth unemployment and women in the labour market.

Fenech said that the document clearly shows that the previous government's policies led to a 1% growth rate in 2012, a 4.2% growth in wages in 2012, an increase in the participation of women in the labour market from 43.6% to 45.8% and a 12.2% drop in youth unemployment.

"Moreover, despite the Labour Party's pessimism when it was in Opposition, Malta achieved 1.6% economic growth in the first quarter of this year."

He also highlighted the increase in competitiveness shown in the increase of exports which have overtaken imports.     

Fenech also lambasted Edward Scicluna's plans to cap the expenditure of each ministry. "What if this is not enough? Would this result in new taxes or in services being cut?" Fenech asked.

The government's plans to open new childcare centres to encourage women to enter the labour market were a positive step, however Fenech said that jobs would not be created by opening new centres, but by attracting investment.

"The country needs to achieve economic growth in order for the government to implement its electoral promises," Fenech said.