Where the parties stand | Tax and expenditure

In a campaign characterized by promises of free tablets and other giveaways: how do the parties plan to make up for the rise in expenditure, through taxation or spending cuts?

With so many promises being floated about during the election campaign, how are the political parties planning on making good on their financial vows?

While Labour has costed its programme at  €732 million, the PN has costed its programme at €1.1 billion.

The PN claims that the added cost will be financed by increased revenue due to economic growth based on a projected economic growth of 3.2% by 2017 and from a spending review set to cut an annual €60m to €90m in expenditure. This amounts to 2% of total expenditure. Increased efforts against tax evasion would recover  €25 million.

While the PN projects a balanced budget by 2016, Labour projects a deficit amounting to 0.5% of GDP by that date. Labour insists that the PN's projections are badly calculated, and that they would actually only bring the deficit down to 1.3% of GDP by 2017.

Labour insists that on its watch, economic growth would come from reducing energy production costs, boosting employment through projects like free childcare, introducing active labour market policies and reducing bureaucracy.

On its part, AD has blasted the other two parties for making unrealistic projections on economic growth and has deemed the budget tax cuts as unsustainable, while describing the promises of the other two parties as an "electoral supermarket". 

While the 2013 Budget is expecting a revenue increase of €83 million revenue, from €840 million in 2012 to €923 million in 2013.

According to AD, this is not realistic in view of the tax cuts announced in the budget. For such an increase in revenue to take place, according to the greens, the economy must grow at a rate "that goes beyond recent trends and which is beyond belief given the global economic crisis". It is also the only party to propose a tax in its manifesto: that on vacant properties, even if first and second properties are exempted, as are all rented properties. 

An analysis of the manifestos shows that the PN is keenest on cutting taxes while Labour reiterates most of the tax cuts. As regards expenditure, PN targets benefit fraud while AD favors a reform of the free medicines scheme. Labour is silent on expenditure cuts, but promises to cut bureaucracy.