The goal is sustainability - PM

The government could have "opened its hands and been more generous" in the budget, the last one before a general election, but it wanted to be prudent and did not want to undo what it had built over the past few years, Prime Minister Lawrence Gonzi said yesterday.

Speaking at a press conference after delivering the budget speech, Dr Gonzi said the government wanted to be credible and work to achieve sustainability.

Commenting about the Lm1.50 cost of living increase which employers and former Finance Minister Lino Spiteri had spoken against, Parliamentary Secretary Tonio Fenech said the government had been carrying out a detailed exercise to monitor food prices and from the information available, it resulted that if international price increases continued rising at this rate, an increase of 99c would have had to be given to cater for such increases.

Dr Gonzi said he was convinced this would not affect the country's competitiveness. There was a time when the cost of living increase amounted to Lm2.25 and this did not hurt the country's competitiveness, he added.

One had to appreciate that the country was not living in isolation and increases in the prices of oil, which reached record levels again yesterday, as well as those of cereals, had an impact on our economy too.

The opposition came out will billboards saying Too Little Too Late before he had finished reading the budget speech. "I must say I saw several surprised faces on the opposition benches as I announced measure after measure which should put more money in people's pockets", adding that he did not have enough time to explain all the measures and the ministers would now do this in the debate that would start next week.

"I hope the opposition will now vote in favour of measures such as reduced tax rates and children's allowance for all children.

"I would appreciate it if they did, but I think they will vote against our measures," he said.

Dr Gonzi said the government wanted to continue to build on the last budget and he was sure that the measures to reduce income tax and give people more money in their pockets would result in a stronger economy, which would mean more revenue for the government.

"This budget lays the foundation stone for our 2015 vision. There will be many budgets after this, and these would have to take into account the €855 million which Malta will be getting from the European Union," he said.