Labour’s plan to deal with the deficit and other financial woes, once in government, is to “focus on results, not on spending” and give incentives to businesses rather than taxing them dry.
Opposition leader Joseph Muscat recently admonished the government for failing to tackle the country’s daily debt bill of €550,000 and pledged that Labour would pursue a sustainable deficit.
The Times asked the Labour Party for its concrete proposals on tackling the government’s debt and deficit, such as whether this would be done by cutting spending or raising revenue through taxes.
In its response, the party did not offer specific solutions but outlined the general policy aims. Nor did the party say, despite being asked, what it considered to be a sustainable deficit.
A Labour Party spokesman started by pointing out that without economic growth no cost-cutting exercise was feasible in the long run.
“The government still underscores the spending and not the results in sectors such as health and education... Labour will be part of the solution and not the problem,” he said.
“For instance, while the government acknowledges inflation as the major bottleneck to achieve economic growth, it hides the fact that the principal cause of this inflation is the government itself, through increasing utility bills to unsustainable levels for families and businesses.”
Financial policies should incentivise businesses and enhance the standard of living of families, the party spokesman added.
“Labour will focus more on cost effectiveness, higher efficiency and productivity; meeting timeframes and avoiding costly delays; eliminating wastages and overruns; eradicating bureaucracy, introducing transparency and more accountability in public finances and public procurement processes.”
The party spokesman referred to “a number of proposals” given by Dr Muscat on how to reduce utility costs in a sustainable manner, to which Prime Minister Lawrence Gonzi had “turned a blind eye”.
To reduce bills and produce cleaner energy, the party said it had already given a firm commitment, more than a year ago, to convert the Delimara power station into a gas-fired one.
“Despite all this, government pressed on with the BWSC power station working on heavy fuel oil. Now the government is caught trying to justify the fact that Joseph Muscat was right and Lawrence Gonzi was wrong on the whole power station saga.”
The party concluded by saying that the full extent of its economic plans would be made available “when the time is ripe”.
“But time and time again we have shown the way forward, while Lawrence Gonzi ducked his head and ignored any positive contribution by the Labour Party.”