‘People know where they stand with us’ – Gonzi on his electoral budget

Prime Minister refutes ‘socially regressive’ tag on wide tax cuts for high income-earners.

Lawrence Gonzi and finance minister Tonio Fenech address the press after Budget 2013.
Lawrence Gonzi and finance minister Tonio Fenech address the press after Budget 2013.

Prime Minister Lawrence Gonzi has defended tax cuts he has committed his government to over the next three years, in fulfillment of his 2008 election pledge to deliver reductions in income tax for all taxpayers.

Finance minister Tonio Fenech yesterday widened the tax band for a swathe of middle- to upper-middle class voters who will pay a reduced 32% tax on incomes ranging from €19,501 to €60,000 - down from 35% in 2013; which will keep going down to 29% in 2014 and 25% in 2015.

As things stand, a chief executive on €60,000 will be paying the same rate of tax as somebody earning €14,000, currently in the 25% tax band. No other tax bands were widened for lower income-earners.

"It was our responsible choice when the financial crisis hit, to focus on the creation of jobs and we have created over 20,000 new jobs in the last five years," Gonzi said, lauding his government's financial stewardship.

"Since we closed this year with EU-confirmed projections of a further 0.5% decrease in the deficit, thanks to the economic growth we have generated, we felt that this tax cut was a way of putting more money in people's pockets, apart from other measures we have provided for pensioners, children's allowances and supplementary assistance."

Gonzi refuted the tag that the widening of the 32% tax rate was socially regressive, saying the tax measure could not be seen cut off from other measures that this year's budget had introduced. "Apart from this tax, we reduced many taxes over the past nine years for women returning to the labour market and for businesses."

The prime minister said that if the budget does not pass in the case that Nationalist MP, who yesterday raised a breach of privilege against finance minister Tonio Fenech, he would go for elections.

"I hope that everyone is aware of the responsibility they will have to bear if this budget does not pass," Gonzi said in a reference to Debono.

Gonzi did not commit himself on whether the increase in the cost of living allowance will take place as from 1 January 2013 if the budget does not pass.

"I won't tackle hypotheses... on 10 December there will be a vote, and if the vote does not pass we will see what happens then. If the budget does not pass, it cannot be implemented," Gonzi said.

The prime minister left no doubt as to this year's budget being the PN's electoral programme for elections that appear to be sure to happen in the first months of 2013.

"Now everybody knows that with the PN in government, they know what they get. This is the fruit of a five-year legislature... and now it is a closed legislature. I thank everybody who worked with me, and I ask the people to judge us by what we have done."

More in Budget 2013
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YOU WANT TO HONOUR THE 2008 BUDGET NOW GONZI!! HAHAHA!! KEM INT HELU, WAS YOUR WIFE THAT GAVE YOU THE IDEA MAYBE SOMEONE IN YOUR FAMILY IS REALISING HOW MANY PEOPLE ARE SUFFERING, AS A NATIONALIST I MUST ADMIT I HAVE NEVER IN THE 40 YEARS I HAVE BEEN WITH THE NATIONALIST READ SO MANY BAD COMMENTS ABOUT YOU, I FEEL THAT THE COMMING ELECTIONS SHALL BRING A NEW MAJORITY TO THE LABOUR BECUASE YOU PREFER TO STAY IN POWER AND LET THE THE PEOPLE SUFFER MORE AND MORE, PIERRE GAFFIERO 243861.
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TAX REDUCTIONS WHAT A LIE, WHY NOT STOP ALL THE ILLEGAL FINES THAT THE VAT AND THE TAX OFFICE ARE SENDING TO ALL THE BUSINESS PEOPLE. WHAT A JOKE, WELL DONE GONZI WHY DONT YOU ROUND UP THE PEOPLE LIKE MYSELF LETS HAVE A TALK OM THE SIDE, WE ARE THE FLOATING VOTERS, YOUR PARTY HAS JUST BECOME LIKE THE LABOUR PARTY TAHT LORRY SANT U MINTOFF, LOOK AT AUSTIN GATT KEMM SAR HELU, YOU ALL HAVE THE ANSWER FOR YOUR MISTAKES NO ONE IS ABOVE THE LAW REGARDLESS OF THE CHANGES YOU ARE NOW DOING IN THE LAW COURTS AND THE POLICE. WE WANT YOU OUT AND WE WILL VOTE YOU OUT, THIS IS NOT THE NATIONALIST PARTY i KNOW, WHY DO YOU LIE ? THE PEOPLE HAVE THE RIGHT TO KNOW THE TRUTH,HAAAA WHAT TAX REDUCTIONS? HAS THE EU ACCEPTED ? OR MAYBE YOU ARE VERY DESPERATE TO GET INTO POWER AGAIN. AVIVA IL LABOUR
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GonziPN has at last realised. We certainly know where we stand with him. Will he be sending letters to all households this time as well, like he did before the 2008 elections? If yes, i wonder what he will be promising me this time.
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@mber. The answer is simple. The money will come from TAXES to the tune of 195,000,000 euro introduced in this budget over this year's total !!. And they have the gall to say they never increase taxes . Neither Gonzi nor Tonio told us this in parliament. If one really wants to know the real budget one has to go through not the budget speech, but the other voluminous reports presented on Parliament's table. Tonio did not tell us that for the first time ever, single minimum wage earners will be taxed to the tune of 46 euro per year. What's more,may I ask the PM and our Minister whether they will refund us for the extra money we pay from today onward on Petrol, diesel, alcohol, cement,and tobacco ?. I ask this because Pinocchio said,,"If the budget does not pass, it will not be implemented". Are you real ?. Come on.
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Obviously the budget seems to offer a lot to society. What is not stated is from where shall the funding for this budget come? The budget is full of promises that are probably completely unachievable given the current economic scenario. One big mistake in this budget is the tax reduction for those paying 35% tax. This will have serious repercussions on the local economy in a few years time. Other boasting about investments, etc. are interesting as they are just based on EU funding which if these funds are withdrawn will cause the schemes to be scrapped!
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While the budget does address the problems of some specific disadvantaged groups it will be remembered for putting more money in the pockets of the upper middle class and the rich. To this extent it is socially regressive for the groups who have mostly seen and felt an effect on their standard of living in recent years have been the pensioners and the younger middle class who earn an average wage and who will not benefit from this drop in the higher tax rate. For me in this respect it seems more a budget which a US republican president would propose. Together with the 500 euro a week ministerial increase this bonus for the rich is what will stick in people's mind and which those struggling to make ends meet will remember in the polling booth. Fairness and justice should have concentrated on widening the 15% tax band and a progressively increasing rate for those earning over 60000. The PL must be relieved in that the budget gives them another unexpected opportunity to chip away more votes at the margins of the suffering lower middle class.
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Yes I know where I stand with the Nationalist Government --> "IN HELL". Thats where I have been for the last 25 years. I was dumped in a rubbish crater, haressed and threatened by DGs Directors and A/Directors, disciminated in allowances, overtime and promotions etc, and this was all because of my political colour. People who know me knows that I didn't deserved that sort of treatment not even those who support you. People both locals and foreingers can vouch that I did more than I was supposed to do and I am proud of it because the people are entitled to be servered and be treated fairly after all I was paid by their taxes under all past Governments.
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GonziPN won a year in power and the country lost a year of stability. We are back to November 2011 and no amount of electoral gimmicks are going to change this reality. An other vote for GonziPN means an other 5 years of failed leadership!
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Yes Dr. Gonzi we do know where we stand with you.........with our vote in our hand ready to vote you and your cronies out of office! You have wasted another 41/2 years for this country and our children. It has nothing to do with the economy. It's all about the way you have destroyed this country's moral and ethical values.
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Yes Pinocchio we know where we stand as much as we know where you deserve to stand: IN THE OPPOSITION. We know where you stand: in promises you never keep!!
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A budget made to impress us but a budget that gonzipn knows only too well will not go through..... A political move to destroy the radicals in Pn as voting against will hurt their credibility, voting in favour is like dis-crediting what they are standing for..... Lets see the outcome of this and watch our country's demise.
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"People know where they stand with us" -- that's why PN are unlikely to win the next election.
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we know where we stand.vote labour
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Indeed! Yes we know where we stand: FALLIMENT, KORRUZJONI AND BROKEN PROMISES! ... Your time is up Gonz, time to say good-bye - and good riddance! Go join your wicked uncle in hell.
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300,000 on a tent for horses, 80,000 for a 20 minute celebration to launch Arriva, 184,000,000 for a power station that does not work, 2,000,000 for a couple of trees in Valletta. Diluted low quality petrol that damages engines amongst highest prices in European. And this is just a little we know about the successes scored by your friend (and our clown) Austin Gatt... Surely Gonz we DO KNOW where we stand with you.