Increased spending not going on jobs or investment - Muscat

It was not true that the government spending which had caused the deficit to soar was going for job creation, Labour leader Joseph Muscat told a press conference this morning.

He said that while The Times had reported that the government had spent €3.7 million to help companies retain their workers over the past months, the deficit had risen by €55 million.

While the Prime Minister was promising to create jobs, the European Union was not believing him. Indeed, new EU projections showed that unemployment would rise by a further 0.5 percent this year and the number of jobs next year would rise by a marginal 0.2 percent, or just 300 full time jobs. In February this year, unemployment was almost 1,000 higher than in the same month the year before.

Dr Muscat observed that the deficit last year mushroomed from a projected €68 million to €266 million and by a further €55 million this year alone.

During the same period investment had not increased. Therefore this deficit had not served to attract investment either.

The bottom line, Dr Muscat said, was that the deficit had ballooned because the Prime Minister had lost control over government spending. At the same time, revenue had declined because fewer workers were working.

Dr Muscat said job creation was important, and so was purchasing power. Yet in the years since Dr Gonzi had become prime minister, price inflation was consistently higher than wage inflation. As a result, the workers could not maintain the living standards they were used to.

12 EU countries had lower price inflation than Malta, but only one country had lower wage inflation than Malta

Yet, instead of improving the situation, the governemnt had shocked the country by imposing drastically high water and electricity tariffs, Dr Muscat said.

The Prime Minister, he said, was increasingly being associated with bills, inflation and unemployment.

Labour, he said, wanted to see the reintroduction of the price-control mechanism that was in force ahead of euro adoption. It also wanted to see the creation of a Consumer Protection Agency.

VAT DEPARTMENT INVESTIGATION

Dr Muscat said that it was unacceptable that weeks after the case of corruption was revealed at the VAT Department, the people had not been told anything on how big this case case was, and who would assume political responsibility for it.

It was being alleged that the case involved millions of euro and had been going on for a long time. Should that be the case, the people would expect somebody to assume his political responsibility and consider his position, Dr Muscat said.

MIGRATION

Replying to a question on migration, Dr Muscat said that in view of the lack of real solidarity from other EU countries, he agreed with the policy for immediate repatriation of migrants.