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Budget 2017 to focus on ‘prosperity with social justice’

Finance Minister Edward Scicluna launches pre-budget consultation process

paul_cocks
Paul Cocks
10 August 2016, 12:51pm
The next budget to be presented by the government will allow the government to consolidate its position without losing what it had already gained, Finance Minister Scicluna has said.

Launching the pre-budget consultation process, Scicluna said Budget 2017 will be targeting ‘prosperity with social justice’.

The government's aim is to further reduce the deficit, while maintaining a social conscience and guaranteeing a decent standard of living for everyone.

“There are challenges to be faced; particularly maintaining a steady economic growth,” the Minister said.

The rate of growth will determine how soon Malta's economy can converge with major European economies.

Scicluna said it was evident that schemes introduced by the government were having a very positive impact on society and the economy.

It is estimated that by the end of 2015, labour market reforms launched by the government led to 2,032 persons engaging in employment.

Through the introduction of free childcare services, for example, more mothers were joining the workforce year on year.

The government's deficit at the end of 2015 was below the European average; this would be maintained this year as well.

The real GDP growth levelled off at slightly more than 5% in the first quarter of 2016, down from 6% registered in the second quarter of 2015.

As for the government's expenses, Scicluna said the recurring expenditure for the first six months of this year were €13 million less than budgeted.

The government's balance was steadily increasing while general debt was on the decline, he said.

Since 2014 the rate of investment started growing again reaching 25% of GDP by the end of 2015.

‘Saving wealth for times in need’

The government's policy was not to spend everything it had gained through the country's strong economy.

"It's much wiser to save that wealth for times of need," Scicluna said.

In 2015, he said, Malta continued to be one of the top economic performers in the EU, achieving a rate of economic growth that was more than three times the EU average.

This significant growth was being driven by domestic demand reflecting expansion in both investment and private consumption.

Strong labour market developments, moderate wage appreciation and subdued inflation also contributed to the growth in the economy.

In 2015, imports grew at a higher rate than exports, but 2016 will see a reversal of this development owing to less investment with high import content relative to 2015.

Scicluna said the economy could not progress if it was not supported by an expeditious access to redress and a fair justice system.

To this end, a number of amendments to the Code of Organisation and Civil Procedure were enacted earlier this year to further expedite civil and commercial cases.

Most importantly, the recent enacting of the Constitutional Reforms (Justice Sector) Act contributed towards increasing transparency, good governance and strengthening the notion of checks and balances.

3,200 claimants off the benefits system

With regards to social solidarity, Scicluna said that between December 2014 and July 2016, 3,200 claimants had left the benefits system and found employment.

He said the government was at present reviewing the existing system of the carers' pension and the social assistance carers' pension to widen existing eligibility.

It is the government's intention to to reform the two schemes and provide a single revised carers' pension.

In order to increase and enhance basic education skill levels, the government was committed to continue addressing the Early School Leaving rate as well as tackling school absenteeism.

Scicluna said the government was equally committed to support the continuous development of teachers in light of their pivotal role in the education system.

He also referred to the government's increasing focus on high quality care, noting that life expectancy in Malta had climbed to 82 years in 2015, placing Malta in the top 20 countries in the world.

The government had sustained increases in investment expenditure allocated for public health expenditure over the last few years and would continue increasing investment in this sector, he said.

On the issue of energy, Scicluna said that next year would see substantial progress in the demolition of the Marsa power station and rhe chimney at Delimara, signifying a complete breakaway from the old, inefficient energy mix to a more efficient, healthier and reliable generation capacity made up of the new plant at Delimara (D4), the Delimara D3 plant which was being converted to gas, and the electricity inyerconnector between Malta and Sicily.

The government had also planned a number of projects to improve the transport system, including works in Marsa which would commence in the last quarter of 2017 and the Kappara Junction project which had already started.

In addition, a Malta-Gozo link feasibility study was also currently being carried out to better understand the geological challenges of building a tunnel between the two islands.

paul_cocks
Paul Cocks joined MaltaToday after having spent years working in newspapers with The Times...