Budget 2012 should be honest, diligent and transparent - PL

Labour Party presents Budget 2012 expectations hoping for diligence, honesty and transparency.

From left: Labour MP Karmenu Vassallo; Labour MP Charles Mangion; Labour MEP Edward Scicluna
From left: Labour MP Karmenu Vassallo; Labour MP Charles Mangion; Labour MEP Edward Scicluna

Sitting behind the word ‘Ghaqal’, Labour shadow finance minister Karmenu Vella and Labour economic affairs minister Charles Mangion together with Labour MEP Edward Scicluna, said they expected the government to be diligent in the Budget 2012.

Vella said the Labour Party was expecting honesty and transparency in the Budget 2012 following several discrepancies made apparent in published deficit and debt figures.

“Fiscal consolidation has to be accompanied by economic growth in order to be sustainable. On top of this, economic growth should also be realistic not just represented virtually by figures alone,” Vella said.

Vella said a major concern was that the rate of debt increase was much more than the increase in economical growth and if fiscal consolidation were not to be achieved, families and enterprises, both large and small, would suffer the consequences.

“Warnings from the EU, Credit Rating agencies and the Auditor General all indicate a lack of diligence on behalf of the government when it comes to the economy but Finance Minister Tonio Fenech seems to be just dusting these off as simply an issue of calculations,” Vella said.

On electricity and water bills, Vella said the government should guarantee that if the cost of oil goes down, bills should in turn decrease so as to honour their previously made electoral pledges.

Mangion said there were several “structural weaknesses and challenges” which needed to be addressed including workforce qualification.

“The EU suggested that Malta should improve its workforce education level to improve the economical situation. A better education strategy needs to be implemented to increase the level of qualification of our workforce,” Mangion said.

The high percentage of school leavers with lower secondary and even primary education in Malta reflects the quality of our workforce, according to Mangion, and said the issue needs to be tackled to increase the education levels of the Maltese workforce.

Speaking on investment, Mangion said the economic environment needs to improve for increased investment.

“This week, CEOs from three large companies have said that their challenges lie mainly in government induced costs such as the rent of the company, unexplained service charges and energy prices,” Mangion said.

Scicluna said that should Malta fail to improve its fiscal affairs regarding deficits and debts and not properly explain its intentions on how to reduce them, the EU executive could propose a €12 million fine to be imposed by the Commission.

“This amount would have to be deposited by Malta and will earn interest. But should a further six months without satisfactory improvement, the interest would be lost and the fine which could increase to €30 million, will be taken from the amount deposited,” Scicluna said.

The Labour MEP said that plans and reforms of the government should display decreases in debt and deficit and allocate appropriate resources to stimulate economy.

Vella said that it would be irresponsible for the government to fulfil the electoral promises made by the Nationalist Party in 2008 to slash the top income tax rate in response to the predicted economic crisis.

“It would be an electoral gimmick. The government would have needed three years to recover from such irresponsible actions,” Vella said.

According to Vella, if the government was being diligent, Malta would not be receiving warnings from the EU.

“The government’s creative accounting has been hiding certain things and figures from revisions of accounts are displaying massive discrepancies in, for example, exportation. A 5% variant is usually expected by it seems that there are billions of euros which are spontaneously appearing in reviewed figures,” Vella said.