Updated | PN wants universal €170 income tax cut, Muscat reacts

Shadow finance minister Tonio Fenech says 'a fair COLA increase' should have excluded reduction of utility tariffs, calls for €170 income tax cut for all • Prime Minister says Fenech suffers from 'credibility deficit', government criticise Opposition for 'not yet realising that the country is moving in the right direction'. 

The Nationalist Party has come up with four proposals to make up for the miserly 58c COLA increase, one of which includes a €170 cut in income tax for everyone.

Addressing a press conference at the PN's headquarters, Nationalist MP Tonio Fenech said the 58c COLA increase was not a fair compensation. He argued that while the government should not play around with the established mechanism, it should however compensate for it.

A determining factor for the meager increase was the reduction in water and electricity bills. However, Fenech said, not every household received the same reduction and those who were already on the lower end of the consumption will be the ones to fare the worst.

"On one hand there is the government pledging a better living and on the other it is not compensating for the cost of living. We all know that prices have gone up. The 58c increase ultimately means that the government is compensating itself for the reduction in tariffs," he said.

Fenech, who also doubted how much households were receiving cheaper bills, argued that if the reduction of energy bills were to be excluded from the mechanism, the average COLA should be of around €3.48.

"The government's rhetoric is always a positive one, highlighting economic growth and financial stability. It is now time for the government to honour its electoral pledges and exchange this positive growth to measures that benefit the people," he said.

In a reaction, Prime Minister Joseph Muscat tweeted that Fenech suffered from a credibility deficit after having not cut income tax as he had promised in the past administration.

A government statement echoed Muscat’s tweet and criticised the Opposition for “not yet realising that families are witnessing the country moving in the right direction”.

“Families are feeling this difference financially and will continue feeling it through measures that will be taken in Budget 2015.”

The government went on to say that the Opposition doesn’t agree with reports from the European Commission and credit agencies Moody’s and Fitch that said that the economy has grown under the current administration.

“This government will once again present a budget that will help those who need it most and that will reduce water and electricity bills, this time for businesses.” 

Fenech said the government should decrease income tax for everyone by €170 and seek to compensate those who are on minimum wage and don't fall within any tax bracket.

Pensions for the elderly, Fenech said, should increase by €200. During the electoral campaign, the Labour Party had pledged a pension that reflected 60% of the national average wage.

Fenech added that government should also help persons at risk of poverty.

More in Budget 2015