The European Union has accepted the Maltese government’s request to allocate funds for a gas pipeline to Malta, Prime Minister Lawrence Gonzi announced yesterday.

Tough decisions taken in difficult circumstances

Speaking in Parliament on the motion on the Budget debate, Dr Gonzi said he had not closed the door to any proposals on power generation, including a natural gas link to Europe along with the interconnector.

Neither had the government ignored the proposals by Norwegian investor Sargas who proposed a floating power station using an oil, coal and biomass solution, although proposals in this case had not been presented. The government aimed for flexibility through the interconnector to provide the cleanest energy for the best price.

The government was taking tough decisions in difficult circumstances, but the opposition was ignoring such realities. The sacrifices which the Maltese had to make between 2004 and 2007 paid off notwithstanding the failure of various economic institutions. The effects of the financial crises had not yet worn off and would still affect Malta.

The government had intervened financially to help companies that were in danger of resorting to major layoffs and, as a result, they had not only retained their staff but they recruited more and increased their investment. In 2009, there was an investment of an extra €35 million and another €74 million in 2010.

These were the projects and initiatives that helped the Maltese overcome the international financial troubles, he said. It seemed that the only one ignoring these results was the opposition, which ironically enough was conceived as the workers’ party, Dr Gonzi said.

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 that 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.

Malta’s situation was compounded by the Arab spring, 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 euros. The tourism industry had faced a major risk because of the proximity of the fighting.

‘Next year won’t be easy’

Respect was also garnered when Malta treated the injured and assisted in the transportation of people who wanted to leave the embattled country. Malta managed to do what other countries did not manage. Dr Gonzi said he was proud of how the situation was handled.

And then, last Monday, Dr Muscat acted like all this had never happened. Those who were bent on achieving their personal ambitions were prepared to also ignore the truth.

Dr Gonzi said that the economical analysis had to be taken in the context of the dramatic situation the country was facing. Notwithstanding these difficulties, Malta had managed to achieve a very good economical result – a good track record when compared to other countries.

Populism was not a good measure to make decisions. The government had managed to achieve such results through prudence.

The 1996-1998 Labour government had increased power tariffs when oil prices were at $12 a barrel. Oil prices currently stood at around $100 a barrel and had varied by 30 per cent in the previous three weeks. Such instability put the government in a difficult position when planning for next year.

It was contradictory that Dr Muscat had said there was the need to tax polluters yet he was proposing cheaper power tariffs to all.

The privatisation of the dockyards, the restructuring of AirMalta and the public transport reform had all been difficult decisions which had to be taken given within the context of the current international crisis.

Dr Gonzi said he could not understand why Dr Muscat had failed to mention the economical impact the Libyan situation had had on Malta’s financial situation. He had emphasised the importance of civil rights yet he had not proposed returning to their rightful owners the three Labour Party clubs, requisitioned during the “worst days of extreme Socialism”.

Dr Muscat had changed his position on the EU. It was time that he also changed his strategy and trusted the people, Dr Gonzi said.

Nonetheless the people deserved to have a clear picture of the difficult situation around us. The Prime Minister repeated that the coming year would not be easy but budget strived to turn challenges into opportunities.

The proposals presented by Dr Muscat were nice sounding declarations which lacked substance. He had failed to describe how he planned to implement these proposals and how he would be financing them. Out of the 51 pledges, 25 were simply declarations of good intent, 14 were already being implemented and another three were on the government’s drawing board.

As for the honoraria, Dr Muscat ignored the fact that the Auditor General had said that nothing wrong was done. Dr Muscat suggested the formation of a committee to study the issue which meant that he would be putting the clock back only to put it forward again at a later stage. Dr Gonzi admitted the issue could have been handled better.

The Prime Minister said that Dr Muscat last Monday spoke according to what suited him best. Last year he chided the government when comparing it to Cyprus but this year he did not do so because Malta performed better. Dr Gonzi said he wished Cyprus well.

Dr Muscat’s speech on Monday was populistic. He ignored the increase of 3,112 in the gainfully occupied and the decrease in unemployment which now stands at 6,212. Employment in the private sector constituted 72 per cent of the workforce and there was an increase of 2.3 per cent in the 12 month period ending last June.

The number of women in the workforce increased by 2,568 between June last year and this year. There was a 3.9 per cent increase in part-timers and a 5.2 per cent in persons having a full-time job but also working part-time.

The economic activity gauged by advertised vacant posts increased from 5,927 in 2009 to 10,756 in 2011. The significance of this success was bigger in the light of the international situation and the Libyan crisis however Dr Muscat was hiding these results because he wanted to discourage the people despite saying otherwise.

Dr Gonzi said he could not understand Dr Muscat’s criticism of capital projects which improved the standard of living and provided jobs for hundreds of workers employed directly or indirectly.

Malta was moving mediocrity to excellence, said Dr Gonzi.

The government also registered success in tourism for the third consecutive year. At the present pace, the amount of tourists visiting Malta could reach a record of 1.4 million. Tourists were also spending more.

Investments in Cottonera, Mdina, Gozo and Valletta were not made because the government liked spending taxpayers’ money but because it was under an obligation to leave a better country to future generations and because it believed that Malta could provide an exceptional stay to tourists.

The Labour leader had not answered any of the 10 questions he had asked him to address in his budget reply. Dr Muscat never declared his government’s economic strategy. People had a right to know whether a Labour government would keep reducing the deficit.

The government had reduced the deficit to 2.8 per cent this year. Next year it would be reduced to 2.3 per cent, followed by a further decrease to 1.8 per cent in the following year. People knew where they stood with this government.

Tourist spend on the rise

Dr Muscat also remained mum when asked how he would reduce the national debt while not increasing taxes. This government sought to keep reducing national debt to make it sustainable. €1 billion was related to the dockyard.

Results are excellent, but the road ahead remains tough

The opposition leader had sought to make the people fear the debt servicing costs, ignoring the fact that the government revenue was of over €8m every day. He did not mention that the government invested €1 million on education, €1 million on health and €2.1 million in pensions and social services each and every day.

Dr Muscat also ignored the vote of confidence in the country shown by the huge take-up of government bonds last Friday.

Turning to Air Malta, Dr Gonzi said that lasting solutions were being made. The government and the management offered packages of solutions that would have the least impact on employees and which would open more opportunities to the national airline.

The Budget projections showed that Air Malta had to pay back its €52 million loan next year because this was required by EU rules. The government was allocating €20 million for the airline but it would give far more over the years in terms of the rescue plan being discussed with the European Union.

The third question was what taxes would he increase to reduce the national debt. Dr Muscat said he intended to shift taxation on the basis of the polluter-pays principle but which sectors would be affected?

Dr Muscat also remained silent as to by how much he would reduce the utility bills. One could not forecast the price of oil and he was being irresponsible in making such a promise. He pledged to reduce utility bills when no other country did so because of the high price of oil. “Would he reduce utility bills even if the price of oil kept increasing?” asked Dr Gonzi.

As a responsible leader of the opposition, Dr Muscat should reveal whom he met on proposed power generation alternatives. Since he was certain of the studies available to him, he should publish them.

If Dr Muscat referred to Sarcas, Dr Gonzi said that he had already met the delegation. It had proposed a biopaste solution, which would operate using oil, coal and biomass. It would have been a floating power station.

Dr Gonzi had invited the delegation to submit technical details but since then it was not given a viable solution including having a floating power station.

Dr Gonzi said that he had met Sargas representatives once but events in Libya had changed the parameters involved in the project. Up to date Maltese engineers had not been presented with a favourable technical report on this experimental project.

He said that Malta’s preference was for a permanent link with the European grid. He announced that the EU had approved plans for giving funds to Malta under the European regional development fund to build a gas pipeline infrastructure. Funds would be provided under the new 2014-2020 protocol. This project would enable Malta to be linked with the European gas network which costs less than for LPG.

Night energy tariffs could only be introduced with smart meters which were being installed in households. He criticised the Leader of the Opposition for failing to explain how tariffs would be reduced.

He also queried whether the controversial decisions that a Labour government would take on Mepa meant turning the clock back to decisions taken in the 80’s.

Dr Gonzi said the budget had two main aims – that of giving incentives for economic growth and also supporting families.

Dr Gonzi said Malta continued to attract specialised industries and a digital gaming company was to start operations. Another aircraft maintenance company was to open shop, while pharmaceutical industries were requesting more science graduands and employees with a post-secondary education.

He said university students had increased by 3,000 over the last three years. The number of graduands increased from 246 in 1987 to 2,844 this year. The University budget had also increased from €3.6 million in 1986 to €50 million in recurrent and €11 million in capital expenditure this year. Students from 67 countries attended courses at the University which also was running MA courses for a number of foreign universities.

The BioMalta campus offered the opportunity for local researchers to collaborate with others abroad.

Dr Gonzi also mentioned in-creased investment in culture and restoration works and in aid to farmers and fishermen. He said that new procedures on the importation of vegetables had come into force so that these were confiscated in case of legal infringements.

The motion was approved by 35 votes in favour and 33 against, Chris Cardona from the opposition side being absent.

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