Cross-party budget approval 'positive and mature' - Malta Employers’ Association

The Malta Employers’ Association welcomes the approval of the 2013 budget.

The cross-party approval of the 2013 Budget was described as "a positive and mature development" by the  Malta Employers' Association (MEA)

In a statement issued this afternoon the employers' association expressed its approval of the budget and the manner it was presented.

"Following a long electoral campaign during which the economy had no approved budget, this gesture sends a message of stability and sets the path for the country to get back to business as usual," MEA said.

The association also welcomed the Prime Minister Joseph Muscat's statement that collective agreements will no longer be signed on the eve of elections. 

MEA urged government to continue to build on the economy's strengths and to address its weaknesses, mainly "the chronic deficit and increasing national debt."

In its memorandum to political parties in the run up to the 9 March election, the MEA had stressed that public sector expenditure had to be subject to the fundamental objective of reducing the national debt to avoid facing an unsustainable situation which many other economies are being faced with.

The association expressed its agreement with the Minister of Finance Edward Scicluna's intentions to move towards growth friendly fiscal consolidation, but added that such a direction will require a solid commitment by Government, as well as the support of the social partners.

"The projected reduction of the deficit by an annual 0.6% in the coming years may be insufficient to get public finances on track unless backed by consistent economic growth," MEA said.

It also agreed with Scicluna's announced policy to increase the country's productive capacity to be geared to achieve higher growth targets once the eurozone economies recover. 

On the income tax rates, the MEA agreed to the relaxation of income tax bands only in so far as they do not contribute to a widening of the deficit.

MEA added that further income taxes reductions should only be implemented after a tax elasticity exercise to gauge the fiscal impact of such reductions was carried out.