Government ‘confident’ that Malta will exit excessive deficit procedures this year

The government is confident that the European Commission will exit Malta from its excessive deficit procedures this year, Finance Minister Edward Scicluna said.

“After observing the Budget for this year, the European Commission declared that Malta is no longer under a ‘corrective arm’ but under a ‘preventive arm,” Scicluna said in the second reading of the Budget Implementation Bill in Parliament. “This is because the government has managed to reduce its excessive deficit substantially.”

He said that the consolidated deficit at the end of 2014 stood at €120 million, compared with €223 million at the end of 2013 and €324 million at the end of 2012.

He added that the government managed to reduce its accrual deficits by €64.9 million in the third quarter of 2014 when compared with the same period in 2013.

“This means that the accrual deficits for the first three quarters of the year went down from €238.6 million in 2013 to €229.2 million in 2014.  

“The warnings that the government has lost control over public expenditure because it was employing people rashly turned out to be nothing but a fantasy.”

He said that Malta’s debt as a percentage of its GDP decreased from 74.6% in the second quarter of 2014 to 71% in the third quarter, meaning that it went down from a total of 72.5% in 2013 to 71.9% in 2014, meaning that Malta had the second highest rate of debt reduction out of all the EU member states.

He said that the recent agreement between the government and Shanghai Electric Power led to the government revising its debt predictions for 2015- from 70% to 67.5%.

The budget for 2015, he said, is an extension of the government’s credibility.

“In our short track record, we’ve displayed courage and humility to present a budget by the previous administration, which we are still being criticised for but which we did to ensure continuity and stability.”

He mocked the Opposition for speaking too heavily about investment incentives.

“They’re treating investors like donkeys who need a carrot to follow. We speak about the economy as an engine. The first thing potential investors ask about before investing is about our country’s infrastructure such as energy, transport and communications.

“Enemalta, Air Malta, Arriva and the Gozo Channel were four vital companies that needed restructuring but that the previous administration kept dragging its feet over. On the other hand, this government has decided to take the bull by the horns.”

Budget 'hid' several taxes

Nationalist MP Frederick Azzopardi hit out at the Budget for ‘hiding’ several taxes, particularly with regards fuel prices.

“Although fuel prices did go down recently, Maltese families are still paying more per litre of petrol than they used to back in March 2009, when the global price of oil was more expensive,” Azzopardi said. “The budget also saw the introduction of higher prices for car licensees, government services, crane rentals, and swimming pool licenses, as well as fresh taxes on wine, mobile phones, cigarettes, and cement.”
“This is over and above the rise in social housing rents and MATSEC fees secretly introduced before the Budget.”

He described the budget as one “without an economic direction written by a government who doesn’t want to share its wealth”.
“This is a budget that included a miserly 58c COLA and that didn’t provide measures about how the government plans to tackle the problems in the manufacturing industry and the problem of reduced shop sales.