Scicluna says 2015 Budget to ‘create opportunities not dependencies’

Finance minister Edward Scicluna says young people cannot depend on social benefits for the rest of their lives

Finance minister Edward Scicluna. Photo by Ray Attard
Finance minister Edward Scicluna. Photo by Ray Attard

Finance minister Edward Scicluna today announced that the 2015 Budget will address welfare dependence whilst keeping an eye on maintaining economic growth.

“We don’t want young people to spend the rest of their lives on social benefits,” Scicluna said, adding that the budget will “create opportunities not dependencies.”

Speaking during the launch of the pre-budget document, Scicluna added that the 2015 Budget will aim at incentivising people to find employment rather than encourage people to depend on social benefits.

Cautiously optimistic following “last year’s successes”, Scicluna expressed his satisfaction with economic growth and described the budget as one “full of measures that helped and incentivised every section of the population to enter the workforce, without losing sight of fiscal sustainability”. Questioned by reporters as to what kind of incentives will be offered , Scicluna explained that these have not yet been finalised.

The government “proved itself right” with regards the unemployment rate, which the document claims has decreased from 6.6% last year to 6.5% and reports a 2.9% growth in GDP for the first quarter. Describing the employment and activity rates as “impressive” Scicluna reported continuous growth in employment. “Malta has one of the lowest unemployment rates in the EU, surpassing other countries in both relative and absolute numbers.”

Scicluna denied allegations that government expenditure on employment in the public sector is expansionary, saying that to the contrary, “the stance is deflationary. The number of government employees vis a vis the labour force as a percentage of GDP is stable. The number of workers in the public sector has decreased steadily since 2008”. Scicluna said he hopes to decrease it further.

The minister conceded that not all is rosy, however - the economy exceeded its deficit forecast by 0.1% and the consolidated Tax Revenue decreased by 12.2% in spite of income from VAT and social security contributions exceeding the estimate by some €49.2 million. In spite of this, "“when taking into account the net variance", Scicluna told reporters, he "estimates to be in surplus of €29 million once the revenue from Enemalta is taken into account”

“The deficit is on track for the first 6months”, he added, describing a €5.6million difference between projected and actual figures as “insignificant”.

The Minister cited “many inefficiencies in the health sector” together with expenditure on education and church schools amongst several factors that resulted in the last budget projection expenditure estimates being off target.

Finance Minister Edward Scicluna on new pre-budget document.

Scicluna would not be drawn into commenting whether the government plans to continue with the controversial Individual Investor Programme for the next fiscal year, but said that “all schemes tailored towards growth will be maintained”.

The document titled 'Creating opportunities not dependence' will today be presented to the social partners at the MCESD and government will be holding a series of consultation meetings during September.