Opposition’s pre-Budget proposals target sustainable economic growth

The Nationalist Party has become the first party in Opposition to present a pre-Budget document, with proposals targeting sustainable economic growth and a fairer distribution of wealth. 

Describing the Budget as a “business plan for Malta”, shadow economy minister Claudio Grech told a press conference that the country should improve its infrastructure and seek to attract investment on broader grounds than favourable fiscal benefits.  

“Economic growth can only be considered proper growth if it is sustainable and if it truly improves people’s lives,” PN deputy leader Mario de Marco said. “Malta’s GPD growth is currently too dependent on government expenditure, and the number of people at risk of poverty is on the rise.

“The national debt has ballooned by €500 million since 2013, the total public service wage bill has shot up by around €100 million between 2012 and 2015, and exports have reduced by €721 million between 2013 and 2014. 

“The Opposition has long called for a frank and open discussion about the state of the economy and of public finances. Unfortunately, the government is acting like an ostrich – sticking its head in the sand and describing itself as positive and optimistic while ignoring worrying signs in the economy.”

Key proposals

Energy 

Government should explain why it has agreed to purchase electricity from the ElectroGas consortium at 9.6c per kilowatt hour for at least five years, when it can purchase it for 5.5c from the interconnector. 

Enemalta’s savings made as a result of the current low market price of oil should be passed onto the consumers through a 30% reduction in energy tariffs. 

Government should provide details on planned joint venture between Enemalta and Shanghai Electric to invest in renewable energy in Montenegro, including whether the green energy generated will be carried to Malta through a direct connection. 

Tourism 

Government should come clean on whether it has a Plan B for Air Malta, in the case that it doesn’t break-even by March as stipulated by its EU-imposed restructuring plan.  

The government should carry out a carrying-capacity study to see whether any factors could limit tourism growth in the future. 

Environment

The value of government-owned land outside development zones must be at least equal to the value of land in prime development zones, as a means of “resisting the temptation” to grant cheap ODZ land to developers.

The government should reverse its decisions to split MEPA and to grant 160 tumoli of ODZ land in Zonqor Point for the partial development of a private university campus.

Government should reverse the “uglification” process of Malta’s streetscape and landscape. 

Business

Government should incentivise family-run businesses to “think global” and export their products. Statistics show that 63% of European family-run businesses sell to foreign markets, compared to only 21% of Maltese ones. 

Government should help family-run businesses adopt internal structures that are not dependent on family ownership, so as to help the business flourish across generations. 

The VAT exemption for self-employed earning less than €7,000 should be reinstated. 

Pensions

Government should provide people with information on future pensions that is easy to understand, particularly to women who don’t qualify for a state pension as they would have taken career breaks or worked a part-time basis to care for their families. 

A debate should be held on the feasibility of a second pillar pension system, in light of the fact that third pillar pension schemes advocated by government invariably only attract and reward higher-income earners. 

Social justice 

Government should launch schemes that improve the competitiveness of local industries that employ people on the minimum wage, so as to incentivise them to raise their workers’ salaries. 

Government should introduce a healthy food voucher system for families at risk of poverty, the vouchers of which will be redeemable for meat, chicken, fish and vegetables. 

Government should distribute lunch boxes to schoolchildren hailing from families at risk of poverty. 

Traffic

Government should subsidise school transport for students attending church and independent schools, as it currently does for state schools. 

Government should immediately reduce fuel prices to reflect the current low market price of oil. 

Good governance

Government should enact into a law a 2013 motion tabled by the Opposition to establish a Parliamentary Commissioner for Standards in Public Life. 

Government should publish its agreements with ElectroGas, Shanghai Electric, Autobuses de Leon, Bart’s, and the Sadeen Group. 

More resources must be allotted to police stations situated in crime hotspots such as Swieqi, Sliema, St. Julian’s, and St. Paul’s Bay. 

More resources must be allotted to the Auditor General’s office to enable it to deal better with its workload. 

Labour: PN pre-budget ‘replete with errors’

In a reaction, the government attacked the PN’s pre-budget document as being “negative”, saying it contained “obvious, factual and interpretative” errors.

The government claimed that Busuttil’s proposal for free school lunches for children coming from families at risk of poverty “would add to the social pressure on them from being identified as hailing from vulnerable families.”

It also criticised the PN’s proposal to reduce petrol prices to ease traffic had a “logic difficult to understand” and said the government had already reduced fuel prices in the past.

It said that Busuttil wanted energy prices to further decrease beyond a 25% cut “after having for years claimed they could not be reduced”.

The government said it disagreed with introducing a system where energy prices fall and rise according to the price of oil. “We disagree with introducing such uncertainty… what Busuttil does not say is from where Enemalta’s debts will be paid,” in a reference to demands for Enemalta’s savings to be passed on to consumers.

It also hit out at the introduction of a second-pillar pension, saying this would only increase employers’ and employees’ contributions and reduce business competitiveness and salaries. “Muscat’s government wants a pension reform that does not increase expenses for businesses and workers.”

The government also said that a VAT exemption for self-employed whose incomes are less than €7,000, part of the PN’s demands in their pre-budget doc, already existed. “The only difference is that the self-employed must register that they do not require a tax return. The present system prevents evasion and does not add to the bureaucratic burden for the self-employed. One asks why Busuttil wants to introduce an exemption that is already in force?”