Goals to decrease deficit are not too ambitious - PM

Prime Minister Lawrence Gonzi said his government’s goals to reduce the deficit to below 3% of GPD were not too ambitious, after the European Commission issued a warning to Malta calling on it to speed up deficit-cutting measures.

Speaking on Radio 101, Gonzi said the financial situation can be kept under control if diligent steps are taken to avoid the current crises being experienced by other countries.

“Malta does not need to take any austerity measures. The European Commission has warned all countries that the economic crisis is only expected to get worse and to be prepared, but Malta has shown good figures throughout this year and we can predict that we will achieve less than 3% deficit for this year,” Gonzi said.

According to figures taken from the first nine months of 2011, Gonzi said that Malta will be one of few EU members to have a less than 3% deficit by the end of 2011. “Our goal for 2011 is a 2.9% deficit which we hope to decrease to 2.5% by the end of 2012,” Gonzi said.

The Prime Minister said it was crucial to show a strong economy to attract foreign investors.

On the Budget 2012 to be presented on Monday, Gonzi said he considered it to be one of the most important budgets he has been directly involved with over the past seven years. “During this internationally difficult time, this budget has to consider what is happening around us and be drawn up diligently. Any mistakes we make could result in massively negative consequences,” Gonzi stressed.

Had the government heeded calls made by Opposition Leader Joseph Muscat to reduce electricity and water bills, Gonzi said it would have been irresponsible and “disastrous because the country would just crash straight into a wall”.

“This budget will make a difference to our families and show that we are doing the best for them by investing available resources into what is necessary and beneficial for the country,” Gonzi said.

On the past week’s confidence vote, Gonzi said that he called for it to prove the government’s stability: “I wanted to be clear with everyone including the Maltese and Gozitan population as well as investors that the government was stable enough to continue improving and strengthening the country’s economy.”

Criticising the Labour Party’s unclear policies and inability to provide concrete solutions beneficial for Malta, Gonzi talked about when the PL was in office with Alfred Sant as leader and how the economy was severely affected by decisions of that government.

“I want to remind everyone of when the PL removed VAT and implemented another 28% tax rate to replace VAT. The country’s economy was destroyed and we need to remember this as they fail to prove that they can concretely support their plans to reduce electricity and water bills,” Gonzi said.

Gonzi emphasised the importance of the public transport reform where millions of euros were invested to provide a new more environmentally friendly service. “This is one of many reforms which needed to happen during this government’s term and although the reform did not immediately prove successful, and there are still some faults to be fixed, I have taken lead of a task force to create a system which works.”

Gonzi said the service was unsuccessful for a number of reasons including the amount of traffic in Malta, which was why the decision was taken to distribute responsibility for different aspects to more than just one ministry.

“I took the decision to set up the task force last week. I had asked the PL to set up a parliamentary committee to address these problems but they refused participation and did not suggest any possible solutions. So, I decided to take control to find a solution for the service which will inspire people to increase their use of public transport with an efficient service,” Gonzi said.

As Prime Minister, Gonzi said it is crucial to find a balance between the good and bad, and not always expect to be applauded for decisions taken. “My responsibility as leader is to improve the life of the people and I have learned to find a balance and appreciate my career by looking at all the achievements of our government. Although there were sacrifices made, millions of the taxpayers’ money was invested into healthcare for the benefit of the population because it was considered a priority.”

Gonzi also discussed funds to be invested into Air Malta to save the company and said that the cooperation of unions and all those involved was necessary to successfully restructure the company to retain a first-class national airline service.

Although confronted by resistance from external influences, tourism in Malta flourished even during the economic crisis and Libyan conflict. “Figures positively show that around €99 million was spent by tourists which is much more than previous years and we can look to the future optimistically even if surrounded by turmoil in other countries,” Gonzi said.

Gonzi praised the hard workers in Malta for the success while saying that the government’s diligence resulted in positive results contrary to assertions made by the Opposition.

“The Opposition thinks our government is incompetent and inferior. They just criticise but facts prove otherwise. I admit that there are still things the government has to work on, such as wage and pension schemes, but we cannot do everything at once and need to find a balance when prioritising,” Gonzi said.

Gonzi said that the government and population need to have faith in order to succeed because there is no reason to “give up”.

“We cannot take risks by experimenting. We have to consolidate all the good we have done and see the positive outcomes. We need to be strong to progress further,” Gonzi said.