[WATCH] ‘I wouldn’t trade today’s problems with those of previous administrations,’ Muscat says

Joseph Muscat insists he prefers the problems created by a growing economy than the problems of a country that ran substantial deficits as was the case before the Labour Party was elected to government

Joseph Muscat at the business breakfast forming part of the Labour Party annual general conference
Joseph Muscat at the business breakfast forming part of the Labour Party annual general conference
Joseph Muscat says rent reform by end of summer

The challenges facing the present administration are various, Joseph Muscat admitted, but added that he would not trade them in for problems faced by past governments.

The issues faced by the previous administrations were all of a financial nature, when Malta registered a deficit of €250 million.

“Today, we have problems related to growth. In previous years, people struggled to find employment and begged for an increase in minimum wage,” Muscat said.

He was speaking at a business breakfast in Floriana forming part of the Labour annual general conference. He was speaking just after Finance Minister Edward Scicluna admitted that economic growth may have to slow down in the coming years to stave off the pressures placed on the country's infrastructure.

READ ALSO: Economic growth needs to slow down, Malta wasn't prepared for it - Finance Minister

Muscat argued that at present, the question was not how much money someone was earning but how to have more time dedicated to family.

“In fact, we have a surplus for the third year in a row not by increasing taxes but by investing in infrastructure and social benefits. We went from inheriting a €250 million deficit, 3.5% of the economy, to having a €250 million surplus," he noted.

The National Statistics Office on Tuesday released figures showing how government finances registered  a surplus of €251 million last year and debt dropped to 46% as a ratio of GDP.

“Our rationale was always increasing employment. We did that, for example, by providing free childcare services. Through this, we liberated so many people into the workforce who will now contribute to the economy. A measure like free childcare pays for itself and is based on macroeconomic growth,” Muscat said.

The prime minister said that due to Malta’s size, it was easier to identify those families that were at risk of poverty and the budget exercise was always aimed at providing targeted measures for this social stratum.

Middle class target

Muscat said that several reforms across six years of administration targeted or engendered a new middle class.

“Today, you can’t be on minimum wage for more than one year. An employer is obliged by law to increase your pay,” he said, adding that any increase in social welfare problems were mostly due to higher awareness and the burgeoning multicultural nature of the island.

“This government didn’t go for the approach of spreading all the butter equally. We targeted families with an anti-poverty strategy where we aim to eliminate poverty of children who have at least one parent in the workforce.

“This in-work benefit, along with an increase in children’s allowance, the first-time buyer's scheme, free childcare and a free transport system has alleviated some problems of affordability,” Muscat said, adding that unlike past administrations, this government did not claim that poverty was a perception.

“We are aware of poverty, and there’s still a lot to be achieved, but we are working on it,” he said.

Rent reform will trigger this year

The rent reform, whose White Paper was published in October of last year, is in its final stages, Muscat confirmed.

“Instead of opting for heavy regularisation, this government decided to offer incentives to property owners that offer certain rates. This is sensible regulation, such as making sure that all renting contracts are registered,” Muscat said.

Asked why it was taking so long for the reform to be published and for the government to start working on implementing the rent strategy, Muscat said this was a very important sector.

“We understand how significant this sector is and we’re taking our time because we want things to be done well. While we’re aiming for the publication of the rent reform in summer, we prefer to wait, but by the end of this year, somewhere close to the next budget, we will see its publication,” Muscat replied.

A record year of spending on capital projects

Muscat said that Malta is “begging for all types of infrastructure” where certain localities were still plagued by issues of cleanliness and deterioration.

“The capital expenditure on infrastructure in 2018 was double that of 2012 and is a record high. It is in fact 50% higher than that of 2017. This isn’t just due to the road infrastructure projects, which was also the biggest project of its kind,” Muscat said.

A stronger economy also meant that Malta would not lose one cent from EU funds, Muscat contended. He said that most projects are co-financed by the EU and insisted that if Malta did not have the finances to begin with, the EU’s fractional support would not be enough for most projects.

We need foreign workers

On foreign workers, Muscat said that if it were not for them, Malta would not be able to cater for a changing market.

“We have practically full employment of Maltese nationals, which is why there are so many foreign workers in our country,” he said, adding that the government would make sure that these are no longer exploited.

“As a society, we are evolving, and people are becoming more demanding and seeking new services, such as home carer services. We can’t keep complaining about foreigners when we require their services due to new demands on the market,” Muscat said.

He concluded by saying that it wasn’t a question of whether Malta caters for foreigners or not but whether Malta wanted to keep growing as a country.