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[WATCH] Muscat: Forza Nazzjonali manifesto would lead to 14% deficit

Labour hits out at economic foundation of PN’s proposals

yannick_pace
Yannick Pace
29 May 2017, 9:41am
Prime Minister and Labour Party leader Joseph Muscat (File photo)
Prime Minister and Labour Party leader Joseph Muscat (File photo)
If the Forza Nazzjonali coalition were to implement its electoral manifesto, it would cost the country some €1.3 billion and result in a 14% deficit, Prime Minister and Labour Party Joseph Muscat said this morning.

Speaking at a press conference, together with finance minister Edward Scicluna and Labour candidate Gavin Gulia, Muscat said that with only five days until the election, the Labour Party was presenting more details about the costings of its proposals. He said the Labour Party was also “doing the Opposition’s work” by telling people how much the PN’s proposals would cost.

Muscat stressed that every proposal put forward by a party would ultimately have to be paid for by citizens, through taxes.

“Many of their calculations are mistaken,” Muscat said. “For example, the way in which they calculated pensions is very naïve, or void of any experience.”

According to Muscat it was not possible to raise the minimum pension and only factor in the cost to the country of increasing the pensions for this group of people only since an increase in the minimum pension would automatically require other levels to be raised as well.

“You need to include these people also. It is shocking for someone to want to run the country’s finances and to make mistakes like these,” he added.

Turning to “issues of debt”, Muscat said the government could not be criticised over its economic performance. He stressed that debt was going down, without negatively impacting government finances and warned that a PN government would threaten this performance.

“If they enact what they are saying they will, we will have a 14% deficit,” Muscat said. “They will either increase VAT to 20%, increase social security or increase bills.”

Ultimately, Muscat said, the point was the country would need to decide who it trusted to guide the economy.

“The Opposition is not prepared to run the country. It will endanger work places,” he said, adding that instead of a concrete and costed plan, the PN had put forward a hotchpotch of counterproductive plans that were rooted in very little sense.

“We can offer the stability that will see the country continue to make a surplus,” Muscat said.

Scicluna said that aside from numbers, faith was at the core of economics.

Likening the PN’s proposals a business plan drawn up in a hurry, Scicluna said that no bank manager would think of giving PN leader Simon Busuttil a loan on the basis of his ‘business plan’ for the country.

On the contrary, Scicluna said the PL had proposed a costed plan that was in line with the coming budget, which he said be predicting a surplus while also allowing for the various proposals.

He said that with the PL’s proposals the economy was expected to maintain a 6% growth.

On the other hand, Scicluna said that the cost of many of the PN’s proposals had been downplayed, and were in fact much greater.

The minister pointed out that the proposals did not make sense when one considers the fact that the PN was proposing a constitutional requirement for the country to have a balanced budget.

He insisted that the plan would either see Malta enter to an excessive deficit procedure, result in additional taxes, or would not be enacted altogether.  

According to Scicluna, with Busuttil being the author of at least two PN manifesto’s, it wouldn’t be the first time some that proposals weren’t implemented.

“In 2008, they promised a surplus in two years,” Scicluna said. “They also promised a reduction in waiting lists through to agreements with the private sector.”

Both, he said, had not been enacted, in the same way that the removal of succession tax would be removed and an income tax reduction from 35% to 25% were promised, he added.

Scicluna said Busuttil wanted to gamble with families’ and businesses’ future.

Gulia said that the biggest piece of evidence indicating a lack of well-thought out ideas had been given to electorate when Busuttil said it wasn’t an election based on proposals.

“You can’t present yourself as an alternative government and also say that proposals are secondary and don’t deserve centre stage,” he said.

yannick_pace
Yannick joined MaltaToday as a journalist in 2016. His main areas of interest are politics...