Coronavirus: Opposition supports government’s drive to increase debt

Parliament has unanimously approved a Bill to increase government debt in order to fund the financial aid packages being offered to the businesses worst impacted by Covid-19.

The Bill was rushed through all its parliamentary stages on Monday, after the Opposition, in a break with tradition, voted in favour of a government motion to increase its level of debt in order to implement the three coronavirus aid packages announced in the past weeks.

“Although the Opposition has its reserves on some of the [financial aid measures] - since it believes the government should do more to save businesses and jobs, and should not limit its help only to certain sectors, but to all which are being affected by the pandemic […] - it will not be voting against the Bill, since extraordinary situations require an extraordinary response,” PN MP and finance shadow minister Mario De Marco said.

The Bill will increase the maximum debt which can be held by the government in treasury bills from €700 million to €1 billion, and will raise the debt ceiling for 2020 to €2 billion.

Malta could face 'record deficit'

Finance Minister Edward Scicluna said that the government was applying Keynesian economics - as well as lessons learnt from previous periods of financial crisis, such as the Great Depression of the 1930s - and reacting to the situation not by trying not to spend, but by increasing expenditure and incurring as much debt as was necessary to save businesses and jobs.

Scicluna highlighted that the increase in expenditure could lead to a "record deficit" due to a €300 million decrease in revenue and a rise in expenditure of €700 million.

Nationalist Party leader Adrian Delia said that, contrary to the customary practice of the Opposition voting against a government money bill, an exception was being made in the circumstances. “Where the health of the Maltese people is concerned, we must apply a different type of politics - Malta’s interest comes first,” Delia said.

Delia however criticised the government for not doing enough to help several business sector which were suffering under the burden of Covid-19’s economic impact, including the media sector.