Number-crunching over their breakfasts

People dug into their breakfast as the numbers on the big screen painted a complex picture of the economy.

They sat on big round tables in a large room, listening to Finance Minister Tonio Fenech explain the statistics of the past year in a speech peppered with the words “balance” and “prudence”.

It was a working breakfast organised by the Finance Ministry in the run-up to the pre-Budget document that will be presented later on this summer. The next Budget will be Mr Fenech’s last for this legislature as the Administration slowly enters its last lap.

Union leaders, employer organisations, women’s rights activists and environmentalists listened on.

The numbers were not new. They were published by the National Statistics Office recently and repeatedly used by government exponents as proof of the Administration’s success in managing the economy.

While a bar chart showed the economy entered a recession in the first three months of the year, other tables indicated how exports, employment and wages continued to increase.

Economic reality, Mr Fenech said, was different from what the figures showed. He attributed the statistical recession to losses incurred by energy provider Enemalta after the government decided not to increase utility tariffs and a downturn in giant chip maker STMicroelectronics in the first month of the year.

The Labour Party said later that Mr Fenech was “an amateur”, incapable of understanding the financial difficulties families face.

Union leaders jumped on Mr Fenech’s positive outlook.

“If the situation is not so bad the government should use the Budget to give back some of the money it siphoned off from the people,” the General Workers’ Union’s general secretary, Tony Zarb, said.

In a similar vein, the president of the Malta Union of Midwives and Nurses, Paul Pace, urged the government to fulfil its electoral pledge to cut the top income tax rate to 25 per cent for those who earn up to €60,000.

It is unlikely that the income tax pledge, a significant electoral promise, will be honoured. Mr Fenech said the economic crisis of 2008 and 2009 led the government to redirect spending to targeted groups instead.

“We reduced income tax in the first year; we introduced an advantageous tax for parents this year; we gave mothers a one-year tax holiday when they return to work after giving birth; we helped individual companies overcome the economic difficulties and saved jobs...”

Malta Employers Association director general Joe Farrugia hit a pertinent note when he spoke of his disappointment at the way Parliament was reduced to discussing issues that ignored economic reality.

“It is as if our politicians are cut off from economic reality,” he said, urging them to be “serious and mature”.

The breakfast, it seems, provided a distraction as very few suggestions were made in the meeting. Instead, the proposals will be sent via e-mail on malta.budget@gov.mt.