The proposed sports village at the White Rocks will be relocated elsewhere and a fresh call for expressions of interest would be issued for the development of this prime site, Prime minister Joseph Muscat announced in Parliament this evening.

He also announced that the government would issue a call for expressions of interest for a new yacht marina at Sa Maison.

A call would also be issued for ideas and proposals for a new parking facility in Valletta.

Dr Muscat announced the initiatives in Parliament when giving his official reaction to the Budget.

In his two hour speech Dr Muscat also revealed some points of the John Dalli report on the state of Mater Dei Hospital, saying there were many instances of double payment and disorganisation in accounting and personnel management.

Dr Muscat said that the Budget presented last week was a Budget of Credibility.

He said that the surprise of the Budget was that this was a government which did what it promised, in contrast to the past.

People had got used to political blows in Budgets which came after the election, and they had in the past seen the raising of VAT rates, increases in tariffs and social security.

"This is a Budget of credibility," Dr Muscat said.

"We are not perfect but the people know where they stand because we keep our word."

This was a Budget which struck a balance between economic growth and social needs. This was a government committed to wealth creation and its fair distribution among all people - the well off, the low income people and the middle class, on which the country was built.

Tax cuts created incentives for wealth creation. People were encouraged to work. And thus from the first Budget included tax cuts.

The government had also shown how it understood people's problems and needs and was adopting a strategy based on rewarding hard work. The government wanted to get the people away from the trap of social welfare.

REINING IN THE DEFICIT

One of the first priorities of the government, Dr Muscat said, was to rein in the deficit, which had risen above 3%. In eight months this government pushed the deficit below that threshold once more, a fact which Opposition leader Simon Busuttil did not acknowledge yesterday.

Over the past months, economic growth in Malta was the fastest in Europe. But the government had presented conservative growth figures because it was being prudent.

30 NEW FOREIGN INVESTMENT PROJECTS APPROVED

Since March, Malta Enterprise had approved 30 new foreign investment projects, which, he said, were all real and did not include a Brazilian company - a dig at the former PN leader.

The government was creating the right conditions for job creation - such as by reducing bureaucracy and tariffs, such as the Mepa tariffs. This government did not make promises it did not keep, such as the 7,000 jobs promised at SmartCity.

In the second quarter of this year, Malta saw a 3.6 increase in job creation, the highest figure since the year 2000. Youth unemployment was also falling while salaries were growing.

The government had reduced the top rate of income tax, as planned even though this had not been among its promises. The way how the system would be operated would be exactly the same planned by former minister Tonio Fenech.

But in a surprise to the Opposition, this government had also reduced tax for  middle-income parents and working women and part-time workers. The ceiling of income subject to the preferential tax rate of 15 per cent for part timers had been raised to €10,000 from €7,000, Dr Muscat said.

Persons who were unemployed for two years and found a job would retain part of their unemployment benefits for the first three years. Their employers would also benefit. Employers who engaged apprentices would receive €1,200.

According to EU figures between 1998-2012 the average job creation in Malta was 1,800 per year. This year 2,900 new jobs would have been created. Next year the EU was projecting 3,400 new jobs.

Inflation was falling under this government, but more work needed to be done because some hard working people were still finding it difficult to make ends meet.

Importantly, consumer confidence was currently at its highest.

This, Dr Muscat said, was also a pro-business government because active business meant the creation of wealth.

This summer Malta also broke new tourism records.

Nonetheless, more needed to be done to spur the economy, such as a review of shop opening hours. Consultations would be held.

The government would also tackle bank charges, which appeared to be high. A dialogue would be held on how the banks could help companies invest.

A preferential tax rate of 15% was being introduced on rental from rents. The Investment Registration Scheme was being set up and a fair fine was being imposed on those who never registered before and hence did not pay tax. However this was a final warning for those who continued to keep investments hidden.

Dr Muscat said, was leading Europe in the provision of free childcare facilities as a means to encourage more people to go out to work, while also creating new jobs.

Widows and widowers would retain their allowance when they found a job, as another means to encourage more people to work.

OPPOSITION'S CRITICISM

Dr Muscat said the Opposition leader's criticism was confusing and it was not clear whether he approved of the Budget or not. He criticised the Budget speech when it was delivered. Yesterday he said it was a good budget, and then proceeded to criticise it.

Dr Busuttil's speech yesterday also lacked a detailed economic analysis.

As to this being an election Budget, Dr Busuttil would get his reply at next year's Budget speech, when no major elections were due, Dr Muscat said.

Dr Muscat insisted it was unfair to claim that the tax burden would rise by €400 per person, because a substantial chunk of tax was paid by institutions. But by his yardstick, the tax burden per capita in the last PN Budget rose by €575.

It was the former government which had been planning new taxes, such as a new tax on waste, with documents already prepared for the EU.

It was true that revenue from excise duties would rise by €21 million, but the government would give €60m back. Although excise duties were rising, the price of diesel would, for an unprecedented six months, stay fixed. Petrol prices would rise by 1c in January unless the government managed to negotiate otherwise.

Government revenue from taxes would next year reach €2.8 billion. But it was worth remembering that in a document issued last year, the government had projected revenue that was €26 million higher, meaning €26m more in taxes. It showed how the PN and its leader had no credibility.

The same document also showed that the debt servicing costs would have been €10m more than under this government.

Dr Muscat denied that the country was living beyond its means. Living beyond its means was wasting €100m on a new Parliament building, he said.

OPPOSITION LACKING CREDIBILITY

Dr Muscat recalled that before the election, Dr Busuttil had even claimed that a Labour victory would see Malta needing a bailout and that it was not possible to reduce electricity tariffs. Instead, Dr Muscat said, he was reporting that tariffs would be cheaper, and the Leader of the Opposition needed a bailout for his own party.

How could the Leader of the Opposition be believed when he spoke about the workers and living beyond one's means when that was what he did for his own party and its workers?

Referring to points of Dr Busuttil's speech, Dr Muscat said he wanted to assure the people that VAT paid on vehicle registration would be refunded in full.

Spending on health was rising by €38m rather than fall. Spending for the Commission Persons with Disability was also rising, despite Dr Busuttil's claims.

Similarly, it was not true that Gozo would get less funds.

It was not true that spending on local councils would be reduced. It would remain the same as this year.

And the Budget allocation for hospitality would fall, not rise.

OIL PROCUREMENT

Dr Muscat said the Opposition leader should not try to avoid responsibility for what happened under the former government, such as what took place in oil procurement - the way how a company won most contracts sometimes without even having the lowest bids.

A fifth of tenders arrived late and yet this same company 'coincidentally' was still awarded the contracts. Sometimes oil shipments had a higher sulphur content then specified. One still had to see whether payments were still made for the product as if it met specifications. The police would investigate.

The Public Accounts Committee had also heard the stories of political interference, such as for the €80m purchase of smart meters.

The present government in the space of a few months, had reached a deal with China to save Enemalta, create new jobs, and ensure that this corporation did not remain a millstone on the economy.

POWER TARIFFS CUTS

The Opposition used to liken the promise of lower tariffs to an Alice in Wonderland fairy tale. But the Opposition was now suffering the same fate of Humpty Dumpty, Dr Muscat said.

He wanted to assure the Opposition that all electoral promises of lower tariffs would be kept, down to the last cent. The average tariff cut was of 25% and the eco-reduction would be kept on top of that. For 95% of families, the savings would be of 30 per cent.

The government had negotiated fixed energy prices for five years because experts had told the government that prospects were that gas prices would fall by that time, and consumers could get even better tariffs. In any gas, thanks to the new gas power station, tariffs would always remain lower that the power station which used heavy fuel oil.

The Opposition leader had said tariffs should be cut further. The government wished to do so, but it had to pay off the debts created by the former government.

Dr Muscat said Dr Busuttil needed to explain how he used to argue in favour of lower night tariffs. He used to say the people could use their washing machines at night. But it had now resulted in an e-mail that this idea came up on January 17 after Labour promised to reduce the tariffs. The government was told that the feasibility of a reduced tariff at night was 'doubtful' and with 'little economic benefit to the consumer'. Enemalta was charged €15,000 for this report, done for the PN.

He was telling the Opposition leader that the PN should pay for this report, not taxpayers, Dr Muscat said.

It was because of such obscenities that a party funding law was needed.

JUSTICE REFORM

Dr Muscat said major reforms would be carried out next year. The system would be e-based to reduce delays and inconvenience. Some small but important steps had already been taken.

Talks would also be held with the Opposition and civil society on constitutional amendments.

HEALTH - THE DALLI REPORT

Dr Muscat said he shared the concerns of many who felt they were not well served. A lot of hard work lay ahead, including longer opening hours for health centres.

New systems were being introduced for the procurement of medicines. This was a problem inherited from the former government. Under the new government the number of items out of stock had been reduced to 35 from 113 under the government earlier this year. But more needed to be done. Strategic decisions would be taken after consultation.

Former Minister John Dalli had submitted a report on the state of Mater Dei Hospital. He had found disorganisation stemming from the fact that €230 million were spent without account. Mr Dalli found a trend of double payments and fluctuating prices for the same products, with no questions asked.

He found cases of supplies priced at one amount but paid a higher amount. Contracts were renewed without checks. One supplier charged €1,500 for each repair job, but when questions started being asked, the price promptly dropped to €750.

Malta paid €105m for medical equipment but the inventory showed €67m, and this was not a matter of depreciation.

A substantial part of salary inputting was still made by hand, and there was no uniform system. Human resource management was seriously lacking.

There were 3,200 workers and 534 different shifts! Could anyone imagine a factory working in this way?

There was supposed to be €43m in stocks, but there were no controls and rampant pilfering. And then there were cases were €1m in stocks were literally discovered.

It was found that the time it took from purchase requisition to delivery of medicines took an incredible 18 months. 

These were not political matters, Dr Muscat said, and the two sides should be working in a bipartisan manner. PN health spokesman Claudio Grech had said they would work in a bipartisan manner on such managerial issue and the government would accept. They should work together on a 20-year programme for sustainability, efficiency and quality.

THE ENVIRONMENT

Turning to the environment, Dr Muscat said he understood the reasons for a protest by NGOs. He insisted however that Mepa's hands were tied on the Mistra development after the outline permit was issued under the former government. However under this government, the number of apartments had been reduced to 700 from 900.

Dr Muscat said the Leader of the Opposition should have been ashamed of speaking about the needs of the South yesterday after the PN dumped everything there, including a power station using polluting oil, a waste  recycling plant and so much more. The former government had even taken the people of Cospicua for a ride for three years over the Cottonera project and now the project was almost completed in three months.

The government would keep its word to stop heavy fuel oil use in two years.

COMMITTEE FOR THE SOUTH

The government would set up a committee for the sustainable development of the south, including representatives of the government, the opposition and the church.

CITIZENSHIP - PRAISE FOR HENLEY AND PARTNERS

Dr Muscat said it was still not clear what the Opposition's view on the Individual Investor Programme was. Some within the PN wanted changes, some opposed the proposal as a matter of principle. But the leader of the Opposition disagreed, and was calling for talks.

Some of the arguments being made were hilarious, such as that those granted citizenship would apply for social housing.

Since 2004, 7,000 foreigners were granted citizenship under the former government, rightly once they were qualified. Now the Leader of the Opposition was raising a panic over a few who would invest in the country and pay for their citizenship.

The people who applied for citizenship would be thoroughly vetted, Dr Muscat said.

Dr Busuttil had asked if Henley and Partners had been in Labour's fourth floor, Dr Muscat recalled.

He then proceeded to read a glowing reference about Henley and Partners signed by then minister Tonio Fenech, praising them for their sound advice to the government on the residence scheme and ways to attract foreign investors to settle in their country. Henley would be administering the citizenship scheme.

ADVICE BY ATTORNEY GENERAL PUBLISHED

Dr Muscat said he was also taking up the Opposition leader's challenge to publish the Attorney General's advice saying that citizenship, once granted, could not be withdrawn, as the Opposition had said it would do.

The Attorney General declared that once the state would have accepted to grant citizenship it could not then treat such people differently from other naturalised people. They would have acquired rights and expectations which could not be arbitrarily deprived by law. Although parliament may discontinue or change the grounds for acquisition of citizenship, any attempt to deprive persons who would have acquired citizenship under the programme on grounds other than the conduct of those individuals 'is bound to run into serious Constitutional and legal impediments".

CIVIL UNIONS

Dr Muscat said the Opposition still had to say what parts of the Civil Unions Bill it wanted to change. Was the Opposition really in favour of equality or was this equality conditional.

DRUG LAWS REVIEW

In the future, he said, Malta would also need to discuss the drug laws, including decriminalisation. Could one continue to have a situation where a victim was treated almost in the same way as a trafficker? Such issues terrified him as a parent and needed to be discussed in detail with society.

EDUCATION

Turning to education, Dr Muscat observed that Dr Busuttil never mentioned stipends yesterday. Stipends would continue to rise under this government. €800,000 more had been allocated for scholarships and there were more funds for vocational training and for facilities in Gozo.

Dr Muscat said the government would keep its promises to people with disabilities and their parents. The Opposition had criticised the government for doing nothing except plan, but in 25 years the PN government did nothing.

The White Rocks complex ruins.The White Rocks complex ruins.

WHITE ROCKS PROJECT, NEW VALLETTA PARKING

Concluding, Dr Muscat said the government had held talks with the people who wanted to develop a sports village at the White Rocks, They had said it was not them who chose the White Rocks but somebody else.

It was therefore agreed that this sport village would be located elsewhere and a fresh call for expressions of interest would be issued for the use of the former White Rocks.

A call for expressions of interest would be issued for a new yacht marina at Sa Maison.

A call would be made for ideas and proposals for a new parking facility in Valletta.

Dr Muscat said this was a Budget which would see Malta becoming stronger, and its society fairer.

The House then voted 37-30 for the Budget to be considered in Committee of Supply.

 

 

 

 

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