Aim is surplus as PN pledges cost €1.1bn
The Nationalist Party’s electoral proposals would cost €1.1 billion over the next legislature but it is still aiming to end it with a surplus of over €100 million.
Giving a detailed explanation of the cost of his party’s 125 proposed measures, Finance Minister Tonio Fenech said the PN wanted to make sure it presented a “responsible” and “realistic” electoral programme.
This would offer the electorate a leap in quality while keeping the country’s finances on a sound footing and moving towards a balanced budget, as mandated by the EU.
“We told you that ours is a realistic programme and we are now giving you the details on how much each of our proposed measures will cost,” he said, adding this was the first such exercise in Malta’s political history.
“We are showing how we can continue to move forward while reaching our balanced budget objectives. Labour is promising everything to everyone but it will also be driving the country’s finances into a concrete wall.”
The PN’s projections are based on what the minister said was conservative economic growth assumptions of between 2.3 and 3.6 per cent in GDP over a five-year period, up to 2017.
Apart from the increased revenue generated through economic growth, the Government was also planning an expenditure review that would cut costs across government by two per cent.
It was also planning stronger measures against tax evasion, Mr Fenech said.
The 125 measures would increase the Government’s recurrent and capital expenditure by €1,113 million between 2014 and 2017.
The Budget 2013 was not taken into account and this figure does not factor in EU funding.
Still, the target is to attain a balanced budget by 2015/2016 and of ending the legislature with a surplus of €108 million (see table).
If this target is reached, it will be the first time in more than 30 years that Malta will have managed to balance its budget.
At the same time, said Minister Fenech, the Government was also planning to further reduce the island’s debt, which stands at 72 per cent of GDP, to around 60 per cent by 2017.
The workings presented by Mr Fenech show that the PN’s electoral pledges would mainly entail a rise in capital expenditure, of €603 million.
The biggest investment would be in education, with an additional €100 million spent on new campuses at the Malta College of Arts, Science and Technology and Institute for Tourism Studies, and €40 million more invested in capital projects at the University.
The party’s tablet-for-all-pupils initiative would cost the government €16 million and €24 million would be dedicated to the building of five new schools.
There would be major capital injections in PV schemes for residences (€55 million), new projects in Valletta (€34 million), the building of new roads (€60 million) and in health (€41 million).
In healthcare, the major capital outlay would go towards the development of three regional health hubs, which Health Minister Joe Cassar said would serve as mini-hospitals offering even small-scale surgery.
The PN’s measures would also increase recurrent expenditure by €476 million.
Another reform in the income tax bands would be among the costliest of the proposals, leaving an additional €60 million in taxpayers’ pockets over the course of the legislature.
The reimbursement scheme for out-of-stock medicines would cost €78 million, free childcare vouchers €25 million, the abolition of discrimination in service pensions €30 million and an increase of 200 officers in the police force to serve on the beat would cost the treasury €20 million.