Prime Minister Lawrence Gonzi said today that the deal announced yesterday for the servicing of EasyJet aircraft in Malta showed how Malta was managing to attract investment despite the difficult situation abroad and the doom and gloom painted by the Opposition.

Speaking in Parliament, he also indicated that with the oil price having risen beyond $80 per barrel, the electricity tariffs would rise to what they were a year ago, or slightly more. He said the decision on the tariffs would be taken by the Malta Resources Authority and he would not try to influence it, but once the oil price had risen beyond what it was in October last year, the situation had to reflect that reality.

The government, however, was increasing its assistance to help ease the burden. It had announced in the Budget that apart from the energy benefit, it would be allocating €10 million to help 97% of Maltese households. €2.5m had also been allocated for a fund to help industries suffering from the new tariffs.

Giving his reaction to the Budget, Dr Gonzi placed strong emphasis on the importance of the deal announced yesterday through which ST Technics would open a new aircraft maintenance facility in Malta.

He said the project fell neatly in the government's Vision 2015 objectives to attract high value-added industries to Malta.

The announcement yesterday could not have contrasted more sharply with the doom and gloom speech given on Monday by Opposition leader Joseph Muscat.

Malta had beaten competition from 45 other destinations and shown it was a competitive, attractive investment destination with high standards and a good education system.

Thanks to the agreement, aircraft would continue to be serviced here for at least 10 years, with a value of 1.6 billion dollars. It also meant new jobs for at least 350 workers, plus 100 Maltese who would be engaged as EasyJet cabin crew.

At a stroke, Dr Gonzi said, that announcement had demolished Dr Muscat's criticism on Monday. And now the Opposition MPs were not showing newspaper front pages - because the front pages had the good news of foreign investment.

On Monday, he said, the Opposition accused the government of not keeping its promises. But yesterday's announcement was yet another confirmation of how the government had kept its most important promise - to create jobs. It was also keeping its promise of keeping Malta competitive while bringing in the reforms needed to make even more progress.

Dr Gonzi said the government was also committed to another promise - to fight all forms of corruption. Any shred of information would be investigated. He had full confidence in the investigative institutions of the country and the courts, which were responsible to judge, and he would not let the country slide back to the years when the police and the courts were a tool in the hands of the socialist government.

Dr Gonzi said the government was as accountable for its actions as much as Dr Muscat was accountable for his statements. A year ago, in his speech on the Budget, Dr Muscat had said that the Budget (for this year) did not stimulate the economy. But the figures showed how false that statement was. The government had saved hundreds of jobs as it intervened to help factories which had slipped into four day weeks and were on the verge of dismissing many employees. Such investment had been conditional on long-term returns for the country.

While it was true that unemployment had increased, it was nowhere near the gravity of the situation abroad.

And there were other successes, like the 3,652 women who returned to work in the past three years, a large number of them this year, thanks to tax incentives given by the government. The full time gainfully occupied had risen by 5% (+6,500) since Malta joined the EU, despite a 14 per cent decrease in jobs in the civil service. There was also a 35 per cent increase in part-time jobs.

Last year Dr Muscat said the government lacked a strategy for the time when VAT would have to be imposed on food and medicines. He had already given up on this, but just a few weeks later, the government achieved a major victory when it managed to secure an exemption of VAT requirements on food and medicines.

Last year Dr Muscat said the PL would set up a group to study the situation of education in the Cottonera area and come up with proposals. A year on, nothing had happened and had the PL been in government, Cottonera would have fallen back, as it always did under Labour governments.

Last year Dr Muscat also promised a commission which would proactively propose change at Mepa. Here again nothing happened and not even one suggestion was forthcoming.

The opposition was superficial, all ties and make-up, nothing more, Dr Gonzi said.

POWER TARIFFS

Dr Muscat had also complained on Monday of uncertainty because of the planned revision of the power tariffs.

Dr Gonzi said that it was inevitable that tariffs had to reflect the fluctuations of the international oil price. Over the past year, tariffs rose in October, then fell by 26% in March. Just today, oil prices had passed $80, which was the price in October last year, and experts said it would climb to $100. Malta had to adjust to this reality.

The Malta Resources Authority would take its decisions, but once the oil price had risen beyond what it was in October last year, the situation had to reflect that reality.

The government, had, however, announced in this budget that apart fromt he energy benefit, it had allocated €10 million to help 97% of Maltese households.

Dr Gonzi said the government had directed Enemalta to seek stability in tariffs, as also requested by the social partners. This was particularly important in the post-recession scenario and Enemalta had already locked 75 per cent of its dollar purchases and made oil swaps of 56 percent at prices which gave stability. His information was that current market conditions did not allow more.

Dr Gonzi said that Dr Muscat had tried to mislead the House when he on Monday read a long list of projects announced last year which had not yet been implemented. He conveniently ignored the lead time needed for projects to come to fruition, including planning, the calls for tenders, award of contracts and actual implementation once permits were issued. This was political dishonesty.

As for the cost of living, Dr Gonzi said the Cost of Living Allowance (COLA) given this year was not low at $300 a year.

He said the government, had promised in the Budget to remedy a situation where vegetable prices were high, while the income of farmers was low because of the way the vegetable market operated.

The government was also committed to tackle a situation where local prices were sometimes four times as high as those in the UK. Profits had to be fair in an open market. There had to be a free market with social regulations because there were no rich and poor in the health sector.

Dr Gonzi said that the government had presented a Budget with a series of measures aimed at stimulating the economy - at the same time as other European countries had presented austerity budget with major cutbacks even of social services. The people should realise the significance of all this.

The government had taken tough measures to prepare Malta for a scenario where the recession could give way to a gradual recovery in 2010. The government was also keeping an eye on climate change emission control measures which Malta and the international community would be asked to undertake.

If Malta made the reforms it needed to make, the country would become a more competitive investment destination, he said. His message, therefore, was one of courage. The people should take heart because Malta was being prepared to make the best of the window of opportunity that was opening before it. It did not have oil or other resources, but it held skilled workers, a sound education system and the tools to compete with the best, Dr Gonzi said.

PL REACTION

The Labour Party said Dr Gonzi had tried to reply to a speech made by Dr Muscat last year, instead of this week, but the two initiatives which he claimed had not been realised actually were.

Furthermore, the PL said, how could Dr Gonzi be believed about being serious on climate change, when his government had not even been able to solve the black dust issue?

The PL said Dr Gonzi had not declared at what prices Enemalta is buying its oil. Nor had he said anything on issues such as the commissions for the power station extension and the Fairmount ship conversion losses. He also did not explain how Budget projections had been missed.

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