A new Nationalist government would make further income tax cuts, including reducing the maximum tax rate from 35 to 25 per cent in the case of those earning under €60,000 (Lm25,758) annually, the Prime Minister said yesterday, an announcement to which the Labour leader reacted a few hours later wondering where the money will come from.

As the five-week election campaign entered its second day, Lawrence Gonzi told journalists at a press briefing in Valletta that, if re-elected, the Nationalist Party would continue to widen the income tax bands. He recalled that in the last two budgets the government had already reduced income tax, apart from other tax incentives.

Dr Gonzi spoke of an economic stimulus package from which working mothers would also benefit. This package was the hors d'oeuvre of the PN's electoral manifesto, he said.

The ultimate aim of the proposed measures was to further boost economic activity, attract investment and reward work, Dr Gonzi said.

Later in the day, during a rally for party supporters, Alfred Sant said he had expected the media to ask how much the measure being proposed by the PN would cost and where the money would come from.

He wondered why the Prime Minister did not launch the promised income tax cut earlier if finances were as sound as the government claimed they were. Dr Sant accused the PN of spending the people's money left, right and centre in a last-minute attempt to win votes.

Dr Sant said a new Labour government would aim for an economic growth of between four and six per cent and then it would cut income tax.

Alternattiva Demokratika, the Green party, questioned why none of the two larger political parties addressed the issue of the high number of vacant properties.

The time had come for the big parties to be made to realise this dangerous reality before the country experienced an economic and environmental disaster, AD chairman Harry Vassallo said.