PM challenged to chart country's direction

The prime minister should explain to the people what direction his government intended to give the country and how it intended to address the country's financial problems, Labour Party deputy leader Charles Mangion said.

Addressing a news conference yesterday, Dr Mangion condemned the fact that the prime minister, during a news conference on Monday, failed to refer to the country's financial situation.

As head of government, he failed to give direction or highlight a plan as to how the government was to address these problems which it had created. This, Dr Mangion said, reflected a tired government which lacked competency and ideas.

Although economic expansion, fiscal efficiency, the curbing of public expenditure and the stabilisation of the deficit to around four per cent of the Gross Domestic Product were promised in the last budget, none of these aims was reached.

The deficit now stood at around seven per cent. But had the government not had an indication that this would be the situation at the time? Why had it said that the country's finances were in a strong position on the eve of the election?

Debt in the past 10 years, Dr Mangion said, had gone up by Lm1,000 million. Moreover, the seas were contaminated, the roads were poor, the environment was in a state of deterioration and the welfare system was threatened.

Every Maltese person, he said, was carrying a debt of more than Lm3,000. Between 1998 and 2003 the Nationalist government increased the national debt at the rate of Lm12,500 an hour.

Dr Mangion said that in 2002 government revenue had already dropped in spite of one off items such as the investment registration scheme and MIA's privatisation.

It dropped by Lm8 million from excise and duty, by Lm9 million from value added tax and by Lm12.3 million from social security. This indicated an economic slowdown.

Revenue for the first six months of this year was less than 50 per cent that expected from excise and duty, VAT, social security, miscellaneous items, licences and income tax.

On the other hand, recurrent expenditure exploded. Although this had been aimed to increase by Lm20 million in 2003, this exploded to Lm26.4 million in the first six months and although the deficit was projected to be Lm75 million this year, it was already Lm113 million.

For the government to realise its pre-election estimates, it had to end this year with a surplus of Lm40 million. Dr Mangion said that in the current economic situation this was impossible and the government's creative accounting would not change the picture.

He said there had to be serious monitoring of the income and expenditure of each department and public entity.

The government had to project its income and expenditure for the next four to five years and it had to aim at reducing the deficit in a six- to seven-year period to a reasonable and controllable level.

The country had to reduce bureaucracy, it had to increase competitiveness, improve the essential services provided by the government, insist on accountability and discipline and strengthen the skills of Maltese workers to increase production.

More investment was required in primary and secondary education to ensure that youths would be trained and have a future.

Dr Mangion said that economic sectors in which the country could excel had to be identified and strengthened while all that which gave Malta an advantage on others had to be exploited.

Asked what had become of the report, commissioned by the party on what led to its electoral defeat, Dr Mangion said this was nearing conclusion and would soon be presented to the party.