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Government’s efforts to control public finances and reduce the deficit came in for a scathing attack by Alternattiva Demokratika chairperson Harry Vassallo, who yesterday gave a bleak breakdown of recent statistics issued by the National Statistics Office.
Vassallo expressed grave concern at public finance statistics for the first quarter of the year, which he said showed a worsening deficit position at the same time that the economy was stagnant.
“A revision of government’s fiscal policy seems inevitable at this stage,” Vassallo said.
Addressing a press conference at the party’s headquarters in Sliema, Vassallo said Government was off track from reaching the deficit target of three per cent in two years to be able to adopt the Euro on 1 January 2008.
Expanding on the NSO statistics, Green Party finance spokesperson Edward Fenech said the increase of 2.5 per cent in revenue for the first four months of the year was achieved by factoring in EU grants amounting to Lm16.5 million that were not received in 2004.
“In reality if one were to compare like with like, removing these EU grants and removing the one-off receipt from the privatisation of lotto in 2004, it results that in the first four months of 2005 government’s deficit worsened not by Lm10 million but by some Lm22 million.
“The statistics reveal that lower receipts were registered in income tax, down by 10 per cent – Lm5.1 million – and social security contributions, down by four per cent – Lm2 million. Revenue from VAT increased by just one million, even after government’s drive to improve collection of arrears by forgiving fines. Gross national debt, including letters of comfort issued for parastatal corporations increased by Lm150 million from April 2004 to April 2005. These simple facts show that the economy cannot be drained any further. They are cause for grave concern, particularly in the light of the expected reform in pensions and healthcare,” Fenech said.
The Greens’ finance spokesperson insisted it was unacceptable that in such an economic and fiscal environment government has allocated Lm14 million to construct a quay in Mgarr. “The quay in Mgarr will not drive the tourism industry in Gozo – capital expenditure of this magnitude should have been spread over a number of key projects that improve the island’s infrastructure and embellish both its urban and rural environment. Government has lost all sense of priority in the rationalisation of its resources and the country’s wealth,” Fenech insisted.
The Alternattiva chairperson concluded the press briefing calling for a multi-party discussion to tackle the problems at hand. “What this country needs is not a series of political smokescreens but a serious and intense effort from the political class, employers and unions to agree a common strategy on how to lift Malta out of this crisis. My party’s commitment to such a process has and always will be forthcoming,” Vassallo said.
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