'Budgets of broken promises'

Opposition leader Joseph Muscat yesterday said the government had not kept its electoral promises and neither those made in a number of budgets, only for certain proposals to surface again later.

Replying to the Budget Speech, Dr Muscat said promises that were being made in this Budget had to be seen in context of past budgets and whether one could trust the government. This year's Budget reflected the government's failures and unachieved targets.

While the economic crisis was indeed a factor, the situation was exacerbated by unjustified price increases, lack of good and productive work, corruption (which was an additional burden on families) and the government's incompetence. Until now, Malta was going in the wrong direction and the situation was getting worse.

Many families were feeling that while they were working more, they still could not keep up with prices and expenses.

And what was even worse, the economic projections made in that speech had also gone haywire.

How could the people have confidence in the new Budget, when they could not, as individuals and businesses, draw up their own budgets because the new utility tariffs had not been announced?

In his two-hour speech, Dr Muscat said the three crucial elements in the life of the country which the Budget had not addressed were the cost of living, competitiveness, and corruption, which was now a tax on the people.

Various sectors of the population were not making ends meet, and the government's decision to raise the utility rates even further had instilled uncertainty and spoiled the festive season for many. Indeed, the government had not learnt from the mistakes it made last year.

The raising of the tariffs would also further erode competiveness, so how could the government's stated commitment to job creation be believed?

How could the government be believed when its economic projections for this year had all gone so drastically wrong?

The people were told last year that the deficit would amount to €99 million at the end of this year. It was off by €160 million. Last year the subsidies on electricity and the dockyard as well as capital expenditure were blamed for the deficit.

This year those subsidies had gone, capital spending was lower than planned, but the deficit had still widened.

The government was claiming the deficit grew this year as the government splashed out to safeguard jobs. Yet the Finance Minister himself had said in Parliament he had spent €8 million for this purpose, when the deficit had widened by €160 million. The figures did not add up. Where had the difference gone?

Funds from the EU were to reach €80 million this year yet only €14 million had been received so far, and Malta's contribution to the EU was €66 million.

Economic performance this year was the worst since independence and investment, exports, output, profits and tourism were all down sharply.

The government, therefore, needed to explain how the economy was projected to grow by 1.1 per cent next year and VAT revenue would grow even faster.

How could the government be believed when last year's Budget promises were not realised? Last year the government promised to double the industry incubation centre and create a biotech park but nothing had happened. It promised to invest €20 million for industrial zones but only spent €4.7 million. It promised to invest €6.5 million on Hal Far industrial estate, and spent €37,000. It promised assistance to micro enterprise but no one was told of the legal notice and no one applied. The rehabilitation of the menqa area in Grand Harbour had only translated in plans. Promised road rebuilding projects remained just that.

The micro parks at Mellieha and Xewkija had not come about, neither had the effective monitoring of market conditions. The 'fibre to homes' IT project had not come about, neither had Design Malta, the e-ID cards and the visitor attraction centre in Qawra.

Nothing had come of the promised study on the reintroduction of trams, the transfer of Zammit Clapp Hospital to Karin Grech, the PET scanner at Mater Dei, and the Gozo public transport reform.

Malta had slipped in competitiveness rankings, because of government-induced inflation, at a time when salaries had, in real terms, gone down. The value of the average wage now was lower than when Dr Gonzi first became prime minister.

The €5.82 cost of living increase to be given in next year's Budget had already been used up. And because the government had not adjusted the tax bands, this increase would mean that many people would fall into a new bracket and would pay higher taxes or be ineligible for some benefits. Dr Muscat also pointed out that the students' stipend had continued to be frozen even though costs had continued to rise.

The Opposition leader referred to the amendments made last year and this year to the vehicle registration tax regime and said that in two years, the government would receive an additional €40 million from this source. So much for the promise of no additional taxes. The government would do well to save for compensation of VAT paid on registration tax, which case would continue to be pursued in court.

Dr Muscat asked why the government was hiding its new power tariff proposals? If the government was to lock prices for a year, why had oil purchases not been made when prices were half what they are at present? Indeed, at what price was oil being bought? It was worrying that figures given by Minister Austin Gatt on the average oil purchase price between March and October were between 20 and 26 per cent higher than average prices on the market.

Also worrying was the fact that Enemalta's non-fuel costs had risen by €13 million in six months, when salaries had not gone up. Furthermore, since April, Enemalta's inefficiencies were now being passed on to the people - an increase of €12 million. This was unfair on the people. The government's revenue from this source alone would equal the so-called compensation to be given to all households.

Dr Muscat criticised the government for not giving any compensation to ease the burden imposed by higher prices of domestic gas (lpg), despite its promises.

Turning to tourism, Dr Muscat said it was bad enough that this key sector was under a parliamentary secretary, not a minister but his responsibilities now even included Mepa. A Deloitte survey showed that every €1 spent on tourism showed a return of €8. So why had the government at least not ditched the 50c tax on each tourist?

Dr Muscat said fresh importance needed to be given to retailers. The government was imposing high utility tariffs on this sector, without compensation. Tax credits had been announced. He hoped they would not be mired in bureaucracy.

It was a shame, he said, that less than half of the declared number of beneficiaries had received assistance for the purchase of solar heaters and other subsidies.

In his speech Dr Muscat criticised Mepa for its attacks on its audit-officer and said that in this context, one had to wonder how much the government really believed in the Whistleblower Act. The government was removing the €6 million subvention on Mepa, meaning that the amount would end up being imposed on the people, Dr Muscat said.

On the medical sector, Dr Muscat said the government had, since 2006, promised action to reduce the waiting lists, yet the lists were getting longer. Now the government was saying the lists would be reduced to acceptable levels in three years' time. What were these levels?

Promises made by the government to reduce medicine prices had also been made in 2006. The people knew the outcome.

Dr Muscat said the Opposition agreed about the building of a cancer wing within Mater Dei. But how had costs risen to €40 million from €24 million projected last year? What would happen of St Luke's and Zammit Clapp?

And would somebody please explain how new graves at the Addolorata would cost €8,000 when, before the election, people were promised graves for €3,500. Had the cost of dying gone up as well?

Dr Muscat said the Budget said nothing on rent assistance schemes in the wake of the rent reform.

Turning to education, Dr Muscat said it was shameful that only 40 per cent of the capital allocation was spent last year. And how had just €500,000 been allocated to the new Mcast campus this year?

On sports, he said the government needed to keep its promise of allocating space for a rugby pitch.

Turning to City Gate, Dr Muscat said this should be a project of all the people, and there should be agreement on it. He said the minister had insulted the people when he claimed that the new Parliament House would not burden taxpayers as funding would come from the commercialisation of government properties. Those funds could still have been used on health or education, Dr Muscat said.

He said the government had been similarly hard headed on the privatisation of the dockyard, and yet, many months on, everything now appeared to be still open. Was it true that the Privatisation Unit had made a proposal on the sale of the superyacht facility but the government rejected it? What was happening? What interest did the former CEO have in all this?

Dr Muscat said that only €3 of every €100 spent by the government were reaching Gozo. Gone, in the Budget, were the plans for the Cirkewwa harbour upgrade. A contractor was paid €5.5 million for building three quarters of the San Lawrenz Road, when the whole project was meant to cost €4 million.

When he spoke on rural affairs, Dr Muscat said nothing was said on the rights of animals. And, he said, he was calling for an independent inquiry into the drainage overflows of animal blood from the abattoir.

Concluding, Dr Musat said the Budget had not offered solutions to the country or the people on the cost of living, businesses, jobs and corruption.

The economic crisis would pass despite the government, not because of it, Dr Muscat said. The Opposition had confidence in the people, and that was why its doors were open for all those who wanted the best for the country, not mediocrity.