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.