The government has initialled an agreement with the doctors' union and will be signing an agreement with the nurses union today, Prime Minister Lawrence Gonzi announced in Parliament yesterday. The two agreements, he said, recognised the important service which these professions gave and would enable the doctors and nurses to realise the potential of Mater Dei Hospital.
Dr Gonzi made his announcement during the budget debate when he replied to the remarks made on Monday by the Leader of the Opposition.
In his two hour speech, Dr Gonzi on several occasions spoke on the elections being close, saying the country would be handed back to the electorate in better shape than when the government was mandated with its administration. Malta was now in the EU and benefiting from an EU financial programme of €855 million.
The country had managed to secure record foreign investment including SmartCity, Lufthansa Tecknik and pharmaceutical factories, it had record employment levels and a future that had never looked better.
In his speech Dr Gonzi said the budget was built around the central theme 'Families getting stronger' because families were seen as the central pillar on which society was built.
This was a budget which underscored the progress the country had managed to achieved.
The sacrifices made in the past few years were being translated into millions of liri which would flow to the people's pockets, but the government had acted prudently and responsibly because one could not run away with the idea that all was perfect.
It was true that Malta was approaching an election, but one had to think well beyond that and one could not squander funds.
This was a budget which not only addressed the concerns of families, but was also aimed at sustaining economic growth.
This, Dr Gonzi said, was a budget from which everyone would benefit. That included 76,000 children, thousands of families and persons with disabilities, 140,000 workers, thousands of couples who would benefit from the interest subsidy scheme on home purchases, students, the police, soldiers and hospital workers among many others.
Three years ago, on becoming Prime Minister, he had urged the people to judge him by his actions, and the people could now compare their current experience with life under Labour. Three years ago Malta embarked on a new beginning as a member of the EU. Labour had wanted Malta to go in a completely different direction. Now it was Labour which was saying it had changed direction. But its historic mistake could not be forgotten. The people had made a clear choice and were enjoying the benefits of that decision.
It was significant that this year Opposition Leader Alfred Sant had not questioned official statistics. Nor could he. The results confirmed that his previous criticism was, to say the least, mistaken.
Dr Sant had claimed this was a government which aimed to satisfy the bankers. But the EU's certificate confirming the economy as "credible and sustainable" was addressed to the whole country, not the bankers. It was a certificate which the country could be proud of because it gave confidence to investors. How different the situation was to the time when then Prime Minister Sant had frozen Malta's EU membership application, something which no one abroad could fathom.
It was useless for Labour to argue it had only served for 22 months, because in that period it carried out the central planks of its policies, including freezing EU membership process and removing VAT. The people knew the results.
Last Monday, Dr Sant came out with many promises which surprised not only government MPs, but also many of his own backbenchers, because they had never been mentioned before. And he seriously doubted that they had been costed. Were his proposals to be implemented, the country would go bankrupt.
In 16 years as Labour leader, Dr Sant had a constant record of making the wrong choices. In just the last four years Dr Sant had argued that Malta should not join the EU and become a Switzerland in the Mediteranean. He had said Malta would only receive Lm1.5 million, it would be full of foreign workers and factories would be closing down.
Three years ago when the fiscal consolidation programme was launched he had said Malta should slow it down and it would need up to 2010 to achieve its aims.
Were it up to Dr Sant, the agreement with Skanska would not have been reached, yet it was Dr Sant who then described Mater Dei Hospital as "state of the art".
Two years ago, Dr Sant said the lira should be devalued by 10 per cent. God forbid that his advice had been followed, Dr Gonzi said.
Also two years ago, Dr Gonzi said, Dr Sant argued that Malta should delay euro adoption, first until it reached a GDP growth of 4 per cent and then, of 6 per cent. Yet now Malta was winning plaudits for having achieved the Maastricht criteria.
Dr Sant had argued against low-cost airlines and he had described SmartCity as "speculation." Were he Prime Minister, therefore, SmartCity would not have come to Malta and thousands of jobs would have been lost. A year ago Dr Sant also argued against pension reform, insisting the process be held off to 2012. But what, then would have been the position of the affected pensioners, especially with a frozen maximum pension, Dr Gonzi asked.
Had Dr Sant been Prime Minister, all the above would have happened. And Malta would have hit a brick wall.
On Monday, Dr Sant said the popular verdict on the budget was "too little, too late". Were had he got that from? Did he think Labourites who would benefit from the generous budget measures agreed with him? Or was he the one who was disconnected from the people?
The unanimous public reaction was a positive one and that was also confirmed in very strong terms in a Times survey.
Dr Sant in his comments on the economy had referred to an IMF report, quoting it as saying that it expected economic growth to slow by 13 per cent cent. But that quotation was twisted. What the IMF said was that the economy this year would grow by 3.2 per cent and next year it would grow by 2.8 per cent. Dr Sant should have admitted that the economy would continue to grow.
Dr Gonzi said the government shared the concern expressed by Dr Sant on the cost of living, especially as prices abroad rose. It appeared, however, that MLP policies on this subject had changed. The MLP was now saying that the time of price orders was past. He agreed, Dr Gonzi said. Dr Sant had also admitted that one could not do anything about prices which went up abroad, as long as there was no abuse.
One could, however, ease price increases by giving subsidies, where this was allowed by the EU. This was what the government was doing, as evidenced by the millions being spent on the subsidy on the power surcharge, the subsidy on bread prices and the assistance to farmers who were facing rising fodder prices abroad. Fishermen were also being assisted in diesel purchases.
The mechanism to check prices was also in use and the price of medicines in Malta was compared with prices in three countries. Importers were being told to reduce prices where no satisfactory explanation was given.
Agreements had also been made with importers and retailers to stabilise prices for the next six months.
Another measure being taken by the government in this budget was to put more money in people's pockets.
What should not be done was to devalue the lira, something which Dr Sant had advocated but which would have pushed up prices.
Dr Gonzi said that Dr Sant in his speech on Monday had made strange comparisons. He compared the current rate of job creation with the performance under all prime ministers except himself. The truth was that in his 22 month stewardship, the gainfully occupied rose by just 129. Under the current government the gainfully occupied increased by 739 even though more young people were continuing to study and more people were retiring. Under Labour there were 3,100 new jobs and under this government there were 5,353.
Unemployment under Labour was 5.5 per cent and it was now 4.8 per cent. The number of people registering for work was 6,245 under Labour and it was now 5,914.
It was simply not true, Dr Gonzi said, that the government did not believe that the manufacturing sector could grow. Indeed, the government was investing millions on new factories.
The government also wanted ST Microelectronics to invest more in Malta so that its plant here could become a specialised centre able to overcome the strong competition it faced. The government was working for these aims to be achieved in the same way as it had achieved success in the case of Lufthansa Tecknik and pharmaceutical factories.
On tourism, Dr Gonzi said the figures spoke for themselves. Current results were the best in six years, although more could be done. 825,00 tourists had come to Malta this year compared to 816,000 in 2001. Spending by tourists had grown by Lm14 million, and there was also strong growth in the sector of cruise liners.
Dr Sant had said hotels were closing down, yet whereas in 1999 Malta had eight five-star hotels, it now had 16 with a bigger bed stock.
He was surprised, Dr Gonzi said, by Dr Sant's analysis of the education sector because the people could see the progress that was being made. Illiteracy among those aged 19 and under was 1.7 per cent whereas that of those aged between 40-49 was 6.8 per cent. The earlier generation was the result of the Labour education system.
One could easily see the progress made in the success rate in the SEC exams and the junior lyceums. EU figures showed Malta making the fastest progress among member states in this area. Substantial investment was being made in the University, Mcast and government schools. Dr Sant had conveniently said nothing about the newly built schools and how stipends would henceforth also be given to Maltese reading for a degree abroad.
But it was worth recalling that Dr Sant's Labour government had actually broken its promises on students stipends and converted the grants into loans. It should also be noted that a teacher's salary had risen from Lm3,000 in 1997 to a maximum Lm8,316 at present and a maximum of Lm9,500 in 2010, on which less income tax would be paid.
Dr Sant had spoken on corruption and quoted some foreign report which claimed that the perception of corruption in Malta had increased. This government, Dr Gonzi said, would fight corruption wherever it was suspected. Several people had been arraigned in court as a result. The Economist Intelligence Unit, to which Dr Sant himself used to contribute, recently published its Index of Democracy which listed Malta as the 15th best country out of 167 where corruption was concerned, putting it before Spain, Belgium, the UK, Greece and many others. Still, for the government there was no room for complacency, Dr Gonzi said.
He said that Dr Sant on Monday had not spoken about the environment except to say that two golf courses would be built in Malta and another in Gozo and that these courses would not include building development.
Dr Gonzi said one of the lessons he had learnt when proposals were made for a golf course at Xaghra l-Hamra was that a golf course could not be financially viable without building development. The government had not wanted building on Xaghra l-Hamra and stopped that project.
Dr Gonzi said he had looked up the Labour Party's policy documents and found that Dr Sant was at odds with what was declared there. For the documents actually said that the natural environment should not be further destroyed on the pretext of building new golf courses!
Indeed, Dr Sant had rendered the recently-published documents obsolete. He had declared, without saying how, that a Labour government would create 2,000 manufacturing industry jobs, 4,000 service industry jobs, and raise tourist arrivals to 1.6 million. He had also said that overtime would not be taxed, children's allowance would be reverted to the position in 1995 and the elderly would get the cost of living increase in full in their pension. The documents said nothing about these.
Neither had Dr Sant spoken about the health sector.
He could announce, Dr Gonzi said, that the government had initialled an agreement with the doctors' union - the MAM - which would recognise the service given by doctors, improve their working conditions and permit them to make the best use of the new hospital. He was confident that the agreement would be ratified by the membership of the MAM.
Today the government would be signing an agreement with the nurses' union which would also introduce better conditions and incentives, thus enabling both professions to release the potential of Mater Dei Hospital.
An agreement would also be signed with government pharmacists and paramedical staff to lay the ground for further success in the medical sector to benefit all the people.
The government had also reached agreement to launch the pharmacy of your choice scheme.
Dr Gonzi said he was scandalised by Dr Sant's comments on the breast screening programme. The government recognised that logistical problems existed, but it was determined to address them and launch this programme next year.
The Prime Minister said Dr Sant had not mentioned anything on the reform of the Armed Forces, which would yield better conditions for soldiers, in recognition for the hard work they put in and the risks they took, notably with regard to illegal migration.
Minister Tonio Borg would also be announcing better conditions for the police.
The government was also determined to step up the repatriation of migrants who were not granted refugee or humanitarian status.
Turning to Dr Sant's comments on taxation of overtime, Dr Gonzi said the people could remember how under Labour, there was no payment for overtime, but time off in lieu. Now Dr Sant was saying that a Labour government would not tax overtime. If there was no abuse, this would cost the government Lm12 million. But there could be abuse in that workers would shift to a basic wage and declare all other income as overtime. That would not only mean a cost to the government of Lm30 million, but the workers would then end up getting a lower pension based on their basic salary. This was the worst sort of advice Dr Sant could give to workers, Dr Gonzi said.
He also accused the Leader of the Opposition of irresponsibility when he promised to half the surcharge. This would end up encouraging people to raise electricity consumption, with taxpayers footing the bill, he said.
The subsidy on the surcharge currently cost the government Lm20 million, but how could Dr Sant make his promises without knowing how the oil price would rise in the future? What would he do if oil prices rose to $110 per barrel?
The government was already helping 27,000 low income families and it had capped the surcharge for hotels and major employers. It would continue to provide such assistance, but it would not try to deceive the people, who knew that the international oil price was rising. Dr Sant's promise was only a vote catching exercise, Dr Gonzi said.
The Prime Minister spoke on how the measures on children's allowance would benefit thousands of families. A family with two or more children would have its children's allowance doubled. This would benefit 14,500 families with 33,000 children. A further 13,000 children in low income families would also see the allowance doubled to Lm107. Another 25,000 children would now become eligible for the allowance. The children's allowance was being extended to all families, irrespective of their income.
The government was also raising the disability allowance from Lm5 to 7 per week and also removing the income threshold.
Labour was saying that it would revert to the situation in 1995. But it was worth pointing out, Dr Gonzi said, that at the time, changes in children's allowance were accompanied by income tax cuts so that families who lost on children's allowance actually gained more through a reduction in their taxes.
Labour's proposal would mean that many families would actually lose money. Those earning Lm2,000 with a current allowance of Lm406 would instead get Lm195 and those earning Lm4,000 would see their allowance reduced from Lm752 to Lm348. This was yet another case of bad advice by Dr Sant. Pointedly, Dr Gonzi said, Dr Sant had not said anything on income tax. The reforms launched last year and continued in this budget would leave more money in the people's pockets and stimulate the economy. A married couple with an income of Lm7,000 was saving Lm140; that of Lm9,000 was saving Lm332 and a family earning Lm12,000 was saving Lm582.
The elderly would get their cost of living increase in full, with a third of the increase given as a bonus. It was pensioners' associations which had warned the government that including the full increase in the two-thirds pension would distort the system. But that was the advice which Dr Sant was making, even though technically it would not work properly.
Thanks to the budget, pensioners would retain their pension and still be able to work, a measure which would benefit many, including a large number of self-employed.
Dr Gonzi also listed other budget measures, including the removal of stamp duty when widows or widowers inherited their partner's residence, duty only being paid when the house was sold.
In the case of service pensions, the first Lm200 would not be considered in the computation of the two-thirds pension.
Dr Gonzi underlined the benefits of the interest-subsidy scheme for first time house buyers, pointing out that the government would subsidise up to one per cent of house loans over the central parity rate of 3.75 per cent. The opposition was saying it would subsidise the difference over the interest rate of the commercial banks, which amounted to an open invitation to the banks to raise their rates, Dr Gonzi said.
Other assistance to home buyers including the shared equity scheme and a reduction on stamp duties on properties up to Lm50,000, a saving of Lm250.
Duty on the transfer of property from parents to their children was also being reduced.
The government was also building over 330 new apartments.
Gozo, Dr Gonzi said would benefit from 20 initiatives and he would today inaugurate a banking service centre there, pointing to the potential which the island held not only in tourism, but also financial services.
Concluding, Dr Gonzi said the country was proud of its achievements and could look ahead to its challenges, which were to take up all the opportunities of EU membership, to invest heavily in education and worker training, and to continue to raise living standards.
The Vision 2015 which the government had unveiled was centred on the provision of more and better jobs for all the Maltese and the key to that was education and training.
The budget had shown that the government had responded to the people's aspirations. Soon the people would be asked to judge the government. When this government took office, Malta was outside the EU. It was now a member and enjoying a financial package of €855 million. It was now attracting major investment including SmartCity, Lufthansa Technik and pharmaceutical firms. Thousands of jobs had been created. The country was stronger and the people had the bright future which they justly deserved, Dr Gonzi said.
The House then approved a motion for the budget to be considered in Committee of Supply with 34 votes in favour and 28 against.