Prime Minister Lawrence Gonzi said this evening that the European Commission has made a proposal to allocate funds for Malta in the 2014 Budget for a gas pipeline to Malta following a request by the government.

Dr Gonzi said when speaking in parliament that the government had not closed the door to any proposals on power generation, including a natural gas link with Europe along with the interconnector. Neither had it ignored the proposals by a Norwegian investor who proposed a floating power station using a oil, coal and biomass solution, although viable proposals in this case had not been presented.

Dr Gonzi said the government was taking tough decisions in difficult circumstances, but the opposition was ignoring such realities.

The Opposition, he said, was building illusions but refusing to go into  specifics, such as whether it would continue to narrow the deficit and reduce the debt, and how it would do so.

Speaking in Parliament during the Budget debate, Dr Gonzi  said the government, through the Budget, wanted to convey the message that with seriousness and wisdom, this country could weather the storm raging all around it. That was what it had always done, including when its democracy was threatened.

The financial crisis had brought major institutions and countries to their knees. The Maltese government had intervened financially to help companies which were in danger of resorting to major layoffs, and as a result, they had not only retained their workers, but they recruited more and increased their investment.

Alas, the party which used to claim to be the workers' party was ignoring this reality, in the same way as it was ignoring employment.

The Labour opposition spoke of wisdom, but it painted everything black and discouraged the people. What wisdom was this when one ignored the economic gains made by the country amid a sea of troubles?

How could the opposition give guarantees when it was dependant on matters which were outside its control?

The international financial crisis had entered a dangerous phase, based on mistrust in the financial systems of various countries which was forcing governments to collapse under market pressures.

For Malta, the situation was compounded by the uprisings in North Africa, which put Malta's very reputation at stake while posing huge risks for the Maltese economy. Many Maltese lost their jobs, investments or markets in Libya. The cost  ran into millions of euro. The tourism industry had faced a major risk because of the proximity of the fighting.

And then, last Monday, Opposition leader Joseph Muscat acted like all this had never happened. 

Every honest economic analysis had to be seen against this background. And the record was one which made the government proud. 

OIL PRICES

Dr Gonzi noted that oil prices had risen from €12 per barrel at the time of the last Labour government to almost €150 at one time. It was now between €90 and €100. The fluctuating situation made hedging and futures difficult. The government had drawn up a long-term plan based on difficult decisions, including the commitment to help those households and businesses who were prepared to invest in alternative energy. This was ignored by Dr Muscat. At one time he suggested taxation on the basis of the polluter pays principle, then he said he would reduce tariffs for all, including those who were not deserving or such reductions.

This government over the past months also intervened to save Air Malta, reform the bus service to give the people a modern system accessible to all.

All these were difficult decisions taken against the background of a financial crisis. Air Malta and the bus service reform were still works in progress.

Dr Gonzi said that the leader of the opposition had accused the government of injustices. In that context what was stopping the PL from returning the  properties taken from their owners for used as Labour Party clubs?

Labour, Dr Gonzi said, wanted the people to forget its most recent past, like how a Labour government had frozen Malta's EU application and how Joseph Muscat had campaigned forcefully against accession. Labour had claimed Malta would only get €1m from the EU, and that Malta was but a small fish.

There was consensus now on the EU, but Labour had not changed its strategy. It was still bent on discouraging the people and sowing doubt.

He wanted to be clear to the people, Dr Gonzi said. Next year would be a tough year. The storm was getting worse. But he did not want the people to be discouraged. Despite the difficult times so far, the country had achieved good results this year and the people therefore should still be confident.

MUSCAT'S 51 POINTS

Dr Gonzi said that last Monday, Dr Muscat claimed to have made 51 proposals, but those were soundbites which lacked substance. He had not given costings. He had not said how the proposals would be implemented. Half of the proposals were simply declarations of good intentions. 14 were already being implemented.

HONORARIA

As for the honoraria, Dr Muscat had ignored the fact that the auditor said that nothing wrong was done. Dr Muscat had said he would push the clock back, form a committee, and then push the clock forward again, Dr Gonzi said.

The honoraria issue could have been handled better, Dr Gonzi admitted. But what had been justly given to backbenchers should apply to everyone, including the ministers.

Dr Gonzi said the leader of the Opposition spoke according to what suited him. Last year he challenged the government by making comparisons with Cyprus. This year he did not, because Malta had performed better than Cyprus in all sectors, although he wished that country well, Dr Gonzi said.

Dr Muscat said nothing of how, in Malta, the number of gainfully occupied in the year since June had increased by 3,112 and the number of unemployed was down to 6,212. He said nothing of the increasing number of women in employment, the sharp rise in both full time and part-time work. Salaries were also rising constantly. The number of redundancies had dropped sharply and this year reached 1,254.

These were successes  whose significance was bigger when one considered the international situation and the jobs lost because of the Libyan crisis.

But Dr Muscat was hiding these results because he wanted to discourage the people, despite saying otherwise.

Dr Gonzi said he could not understand Opposition criticism of capital projects. This was the sort of criticism first heard about Mater Dei Hospital. Such projects improved living standards and provided jobs for hundreds of workers employed directly or indirectly on time. 

This government was bringing about a leap of quality because mediocrity was unacceptable. In this context, Dr Gonzi said he wanted to again record the success achieved in tourism, which was this year expected to reach a record of 1.4 million arrivals along with a record in bed nights and tourist spending. This was the result of spending of millions of euro which were saved from other sectors for investment in the tourist product, accessibility and promotion.

On Monday, Dr Muscat made a fictitious exercise to claim that promises had not been kept. This was nothing but superficiality, Dr Gonzi said. He then went on to explain that works were not started and completed in a year, and Dr Muscat's remarks only revealed falsity.

'NO REPLIES' FROM JOSEPH MUSCAT

Dr Gonzi said he regretted that Dr Muscat had ignored the 10 questions he asked him last Sunday. Those were questions linked to the Budget and the country's difficult economic choices, not least those on energy.

Dr Gonzi said he wanted to ask again, what would Dr Muscat change in the country's economic strategy? Last Monday he did not say whether he would stick to current financial targets aimed at reducing the deficit to zero. Next year the budget would be reduced to 2.3 per cent, followed by a further decrease to 1.8% in the following year. People knew where they stood with this government, but what about Labour?

It was easy to promise everything to everyone, but there would be consequences if the deficit was allowed to balloon, undermining financial stability. Was this another exercise like that in 1996 when Labour promised to remove VAT without having an effective replacement?

Dr Muscat had not said how he would reduce the deficit and the public debt because his only purpose was to build an illusion.

For the government, Dr Gonzi said, reducing the debt was a priority and it would continue to insist that borrowing should remain local and borrowing should only be made for productive investment. One only needed to remember that €1 billion of current debt was solely the result of the dockyard.  

Dr Muscat had sought to worry the people by highlighting debt servicing costs, ignoring the fact that the government revenue was of over €8m every day, Dr Gonzi said. This was a government which invested €1m a day on health, among other sectors. 

AIR MALTA

Dr Gonzi said the Opposition leader was ignoring the new realities faced by Air Malta which demanded new solutions for the airline. 

Dr Gonzi said it appeared that progress was being made for a lasting solution for the airline. The workers' agreement on the rescue package was an important step which would open opportunities for the airline.

The government and the airline had offered a package to ensure the least impact for workers who had to leave the airline. The Budget projections showed that Air Malta had to pay back its €52m loan next year, because this was required by EU rules. The government was allocating €20m for the airline, but it would give far more over the years in terms of the rescue plan being discussed with the European Union and which would be revealed in the coming weeks and months.

Dr Gonzi asked how Dr Muscat intended to shift taxation on the basis of the polluter pays principles. Which sectors would be affected?

POWER TARIFFS

By how much did Labour intend to reduce the power tariffs once he claimed to have solutions? Clearly, Dr Muscat, Dr Muscat could not give answers to the illusions he was creating. He was being irresponsible because he knew well enough that he had no control on world oil prices.

Would Dr Muscat reduce power tariffs for everyone even as oil prices rose?

Dr Muscat should reveal whom he had met on proposed alternatives on power generation. He should declare what solutions had been suggested to him, and how he had replied. Once he was so sure, why not publish the studies which, one assumed, had been given to him.

If Dr Muscat was referring to Sargas, Dr Gonzi said  he met a delegation once some months ago. They had proposed a project using EU funds and basing their project on a biopaste solution  - oil, coal and biomass. This was to have been a floating power station. This, Dr Gonzi said was not a renewable energy system but an elaborate system which would collect emissions  and them dispose of them in what was an experimental system.

Some months after he had met this company's delegation, important aspects of this proposed project had to be changed because of the developments in Libya since this project was linked with an option in Libya. 

Dr Gonzi said he had invited the delegation to submit technical details to Malta's engineers, but since then had not been given a viable solution, including the risks of having a power station floating on water.

The government, he said, was aiming for flexibility including the interconnector and other forms of power generation.

Dr Gonzi said the government was considering a natural gas pipeline infrastructure and had submitted a request to the EU for funding. The EU had in reply proposed funds in its Budget for this purpose, which would link Malta to the European gas network.  

Dr Gonzi repeated the other questions he asked Dr Muscat last Sunday and said the people still expected replies.

In the last part of his speech, Dr Gonzi underlined measures announced in the Budget speech a week ago, including credit and guarantee schemes for small businesses and increased investment on education to match demand from investors including those in aircraft maintenance and pharmaceuticals.

Dr Gonzi said it was hoped that the government would soon be in a position to announce another initiative with regard to the aircraft maintenance park.

The Bio-Malta campus, Dr Gonzi said, would offer new opportunities for Malta in research and innovation. So too would be the new investment in digital gaming. All this, he said, was the result of the emphasis on education placed by the government - which had seen the number of graduands rise 10 fold  since 1987, apart from those studying in Mcast.

Dr Gonzi also underscored incentives for the restoration of village cores and  referred to the VAT 'amnesty' insisting that this is an amnesty on penalties for those who settle arrears. Overdue amounts had to be paid back in full.

The government, he said, was also reintroducing the car scrappage scheme.

In the agriculture sector, the government was working on a new scheme to help farmers and fishermen over fuel costs.

An important initiative, he said, was the tax cut for parents, which would be better explained in the coming weeks, dispelling doubts which Dr Muscat sought to instil.

The government was also raising children's allowance and was giving greater assistance to parents of children who sent their children to independent schools.

In the health sector, the government was building a new cancer hospital, giving more free medicines and making progress in some areas with regard to waiting lists. After cataracts, the focus now was on hip-replacement operations.

In terms of this Budget, those aged over 80 who did not live in Homes for the Elderly would receive an allowance while more investment would be made in Homes for the Elderly.

The government was extended maternity leave, as from January 1, with talks on implementation due in the MCESD.

Concluding, Dr Gonzi said the government had managed to guide Malta through difficult times. The results were excellent, but the road ahead remained tough. The guiding value for the government was its confidence in the people. It was proud of the people. One did not change course for political opportunism. Stability was key for this country and he was confident that the country would continue to move ahead, Dr Gonzi said.

PL REACTION

In a reaction, the Labour Party said the prime minister was asking questions and the PL was giving solutions.

It said Dr Gonzi had not offered solutions for the problems his government had brought about.

It reiterated that a Labour government would reduce power tariffs in a sustainable manner through a plan which has various possibilities that are being studied.

The PL said Dr Gonzi had lost another opportunity to give up the €500 pay rise.

In his speech, it noted, Dr Gonzi never once mentioned SmartCity and did not explain how no jobs had been created there.

 

 

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