Whenever the Government reduced the tax burden by adjusting the income tax bands, the country's economy always flourished due to increased economic activity, Prime Minister Lawrence Gonzi said yesterday.
Speaking during a brief visit to Qormi, where he toured a number of businesses, Dr Gonzi said that when the 65 per cent maximum income tax rate was reduced to 35 per cent, the Government increased its revenue because more people had an incentive to work. And again in 2006, more revenue was generated when the Government revised the tax bands.
Similarly, he said, the Nationalist Party's proposal to reduce the tax rate from 35 to 25 per cent for those earning less than €60,000 (Lm25,758) will generate more economic activity, and the Government will increase its revenue.
Within two years, the €46.5 million (Lm20 million) being invested to bring about this tax cut will be recovered, he said.
The Prime Minister said the PN was the only party promising to end the 2010 financial year with a surplus in the country's finances. On the other hand, he said, the Labour Party promised nothing but uncertainty.
While Dr Gonzi was visiting a shop, crowds of supporters gathered outside chanting "Gonzi, Gonzi". One of those eagerly welcoming Dr Gonzi said she had missed Mass to wait for "her Prime Minister".
During a discussion programme on Radio 101 later, the Prime Minister spoke about the way his Government was trying to revive the shipyards, and pledged to continue doing so in line with the EU's regulations.
He recalled that six months ago he had authorised a top shipyards official to draw up a detailed presentation of the shipyards' operations for the Opposition leader, to avoid turning the issue into a political football.
In the afternoon, the PN turned its attention to Gozo. During a meeting with the Prime Minister, the Gozo Business Chamber expressed its desire for the island to have its own council for economic and social development.
Chamber president Joe Grech said Gozo needed a comprehensive development plan designed specifically for the special needs of the island, adding that its own council for economic and social development would be beneficial for the island.
Mr Grech also listed a number of projects the chamber would like to see carried out in Gozo. These included the completion of the upgrading of Mġarr port and the need for a proper air service to Gozo, with the use of an airstrip.
Mr Grech said environmentalists would oppose this idea but said that with consultation, a compromise may be reached.
He said the chamber also saw the need for Gozo to be branded separately from Malta, with its own logo and its own tourism authority. He also proposed that Gozo Channel Company Ltd, which in 2007 increased its profits by 182 per cent over the previous year, should fall under the jurisdiction of the Gozo Ministry.
Dr Gonzi also met the Gozo Tourism Association, which reported that the nine hotels in Gozo experienced 17 per cent growth in occupancy levels in 2007. They also expressed disappointment that there were no statistics available for self-catering accommodation, which amounts to 52 per cent of the accommodation in Gozo.
The Prime Minister ended a busy day with a PN activity in Xagħra. As he was speaking, a girl walked up to Dr Gonzi and handed him her dummy, which prompted him to quip that if MLP is elected, she will have to repeat a class.