Matthew Xuereb
Budget's growth forecast unrealistic - GRTU
The budget's economic growth prediction for 2009 is unrealistic, Vince Farrugia, the director general of the Chamber of Small Businesses said yesterday.
Mr Farrugia said that while all world economies were entering a recession, Malta was being too optimistic, even more than the EU, and was aiming for a growth rate that was not realistic. The government is projecting a growth rate of 2.5 percent, half a percentage point higher than the rate registered this year.
He was giving the GRTU's official reaction to the budget. But while the director general was critical of the government's projections, the heads of the chamber's different sections had mixed feelings about the measures announced last Monday.
In fact, the government missed its target to end the year with a budget deficit of around €68 million by just over €132 million and is estimated to end the year with a shortfall of €200 million.
Finance Minister Tonio Fenech blamed the unforeseen extraordinary expenditure on fuel costs and the Malta Shipyards' early retirement schemes. But, according to the government's own estimates, the figure would still have stood at around €90 million.
Mr Farrugia said the budget confirmed that the overspending of the past years had left the country with nothing to fall back on for a rainy day, forcing the government to introduce measures to increase its revenue.
Moreover, he is predicting a similar scenario next year, describing as "a total exaggeration" that the government expects to rake in an extra €182 million from the budget measures and the utility tariffs.
"What will happen if these unrealistic revenue targets are not achieved", he asked.
Turning to the new car tax regime, he said it was "cruel and anti-social" that people who had bought cars in the past and had paid a high registration tax and VAT would now even suffer an increase in their annual licence fees.
Mr Farrugia and GRTU president Paul Abela reiterated their criticism of the way consultation was conducted ahead of the budget and the introduction of the new energy tariffs, saying there was a lack of confidence in the Malta Council for Economic and Social Development (MCESD).
Referring to the way Infrastructure Minister Austin Gatt once described the MCESD as a "talking shop", Mr Abela said the government had downgraded the council to the point of confirming that statement.
In fact, on the new energy bills, he said the GRTU will insist that its members should not pay more than they consume and subsidise big industry and hotels. The chamber had protested against the new system which keeps a capping on the bills of large-scale industrial consumers, while spreading the new increases on SMEs.
Mr Abela appealed to Prime Minister Lawrence Gonzi to sit and discuss possible solutions.
Sandro Chetcuti, who heads the chamber's developers' section, said the majority of members were considering cutting overtime or even reducing their workforce as a result of the new energy bills and the increase in fuel prices.
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l Galea
Nov 7th 2008, 23:45
Catherine Calleja
You are forgetting that at that time one penny was worth more than it is today.
You also conveniently forgot that wage increases were given in a higher percentage when compared to wages.
Remember Lm4 per week increase in wages?
How does €4 compare with that eh?
Work out the percentages Catherine.
G Seychell
Nov 7th 2008, 15:44
Dear Catherine,
Can you please explain to us what is capping ?
Can you please explain to us the new tariff rates,as not even the car importers seem to understand ?
Can you please explain to us the new Water and electricity rates ?
Now,the government is trumpet glorifying its budget simply because the bicycles prizes were reduced.
Did you noticed,that the Minister wants to know the LENGTH of the new car to the nearest MILLIMETER to solve the traffic problem.
James Grech
Nov 7th 2008, 12:02
Catherine I really impress myself how ppl nowadays opt to mimic our politicians in there replications. Why don't you keep to the topic and not rummage up the past? We all know that the past brought with it both positive and negative behaviours and attitudes. Most probably even if u look back u can think of times which u now most probably regret or not really proud off. I think u agree that we need always to look ahead. Today's problems are surely the result of yesterday's decisions, so let's focus on today and consider what was wrongly done in the past as a lesson to make good decisions for tomorrow. What Mr Farrugia pointed out is true, u cannot deny the fact that for e.g. the new licensing mechanism will penalise those pensioners and hard working families who always try to make ends meet at the end of the month and who have made sacrifices to buy a new car and tried to keep it in the best working condition as possible. I hope that u are not that blinded by partisanism to such an extent that u believe that these antisocial measures will really solve our problems.
Stephen Sultana
Nov 7th 2008, 11:40
@ Catherine Calleja
Just to put you in the picture just in case you don't know, Mr Paul Abela (who is the President of the GRTU) was a former PN Swieqi mayor. He along with Mr Farrugia voiced his concerns about this budget.
So prior shooting up irresponsible comments please get know the facts. GRTU like every union safe guards the interest of the SMEs and like every union it has every right to criticize the wrong doings.
Catherine Calleja
Nov 7th 2008, 10:42
I wonder when will Vince Farrugia become our new Prime Minister. He will surely solve all the problems facing our country as he has a solution to anything under the sun. His boisterous approach to any problem makes you think that he knows all the solutions and therefore we will all be pleased to have him leading the country. But very few still remember the time when he was the Labour's trumpet glorifying its budget simply because tuna tins became one penny less. In those days, Vince, there was no consultation with the social partners-but taxes and tariff were simply imposed on us with the GWU 's blessing.