Achieving targets together

What we have presented yesterday is the most important Budget in years. These times are indeed extraordinary. The situation in Europe is very unstable as growth projections for 2012 are indeed worrying. There is a general reason to be concerned in terms of what the future holds for our European economic and tourism partners. The threat that Europe is going to enter into a new recession is bigger than ever.

The huge deficits burdening fellow European countries, the redundancies they are being forced to put into effect, the reduction in benefits, the increase in taxes and the introduction of payments for education and health are harsh realities that our European trading and tourism partners are facing. Unfortunately, we are exposed to these realities and we stand to face some of the impact of these austerity measures because these will mean less disposable income for the people of these countries, thus resulting in less demand for services and products provided and manufactured here. Therefore, tourism and exports will be hit.

Amidst all this, our direction is clear. We want to ensure the economic and financial stability to retain our competitiveness in terms of attracting investment and generate more jobs while at the same time sustaining our social responsibilities.

The government is committed to reducing its deficit to 2.8 per cent of GDP this year. This will send a strong signal of good governance to potential investors who are looking to expand their operations in Malta, generating new job opportunities. It will also give us the necessary room for manoeuvre, in case of a renewed crisis, to act decisively. This same financial soundness had permitted us to intervene and support the manufacturing and tourism sector back in 2009, saving over 5,000 jobs.

This Budget continues to invest responsibly in those initiatives that stimulate further the country’s economic activity in the months to come while providing the necessary incentive to generate work. In this context, we are pledging over €70 million for investment promotion, the enhancement of our industrial parks and the support to local entrepreneurs.

We have extended the successful MicroInvest tax credit scheme that supports small business in expanding their operations. We are making loans more accessible to small business by proving 90 per cent of required collateral.

Investing in the beauty of our islands has yielded dividends as tourist arrivals have surpassed records this year.

We have sustained, through a mixture of EU and local funding, investment in various capital projects in Malta’s cities, and also in the maritime and road infrastructure .

A sum of €70 million is being allocated to enhance our cultural offering, strengthening the country’s promotion and its connection while at the same time pledging a further €20 million next year to support Air Malta.

This is a Budget that answers to the needs of the families, the elderly and those in the most vulnerable strata of our society within highly challenging realities. The Budget, like others which have preceded it, confirms our continuous commitment to invest further in education and training of our resources.

All this is being proposed without the need to resorting to austerity measures to reduce our deficit. We are achieving this by curbing costs while not shying away from investing in what is needed to generate economic growth and wealth.

We are in the enviable position where we will not increase taxes but we will responsibly alleviate the tax burden of our hard-working families. We are also increasing the minimum rate of the children’s al-lowance by a further €100. Rather than charging for our education services, we will invest more in the education of our children. Instead of putting a price to our health care, we are investing over €64 million in free medicines for those who need them.

Rather than charging higher electricity bills, the financial gain of €20 million that Enemalta will make with the new extension of the Delimara power station will be passed on directly to consumers. This will enable us to retain tariffs at the current levels even though the price of oil is higher than two years ago, when the present rates were set.

We are in this position to deliver these measures because of the decisions we made, even though they might not always have been the most popular. We are in politics not to be popular at all costs. We are in politics to deliver what we believe are the best solutions for the country.

This Budget is built around your needs, keeping in mind the requirements of the country within an international context. It is a responsible and prudent Budget, which aims at providing the necessary support to our families while delivering the right measures to stimulate further economic growth.

We want this country to be fully enabled, starting from our hardworking families to our students, our elderly and those with special needs and all those creators of work so that we will, together, steer through this turbulence just as we have done so far.

The author is Minister of Finance, the Economy and Investment.