The Prime Minister yesterday attacked Leader of the Opposition Joseph Muscat’s credibility, warning his “populist decisions” would bring Malta to its knees – the same as happened in neighbouring countries that had not taken the tough decisions Malta had.
Those who promise a great deal fail to realise this sows instability
Replying to Dr Muscat’s speech on the Budget in Parliament on Wednesday, Dr Gonzi used much of his two-hour address to highlight the dangers that, he said, would jeopardise whatever had been achieved if the PL won the next general election. The people would be asked to make a crucial choice which could make a major difference to their lives.
Dr Gonzi said Dr Muscat was promising everything to everyone without explaining how he would fund it.
Listing his Government’s successes in education, health, employment and the financial and economic sectors, Dr Gonzi said that in the past five years, the country has changed for the better, despite difficult circumstances. The Budget showed that change would continue.
In 2008 the people had returned the PN to power because they had recognised it as the author of major changes.
In spite of the Opposition’s efforts to instil fear about membership of the EU, the whole country had benefited because political changes did not go by political colour. Whatever the people’s judgement, the PN today was giving back a much better situation than five years ago.
Families were now aware of the measures and initiatives promised by the Government, as set out in the Budget, he said.
The Budget allocated €374 million to education, €465 million to healthcare and €51 million to the elderly, among many others; all this while maintaining one of the lowest deficit rates in the EU.
The country’s stable financial situation was the Government’s best certificate. Malta was heading in the right direction and the Government was not afraid to reform and invest. There were instances in which sacrifices had to be made for the good of the economy.
“This is the major mistake of those who promise a great deal, failing to realise this sows the seeds of instability and uncertainty,” he said, adding that although there had been internal strife in his party, he understood that this came second to the country.
Malta faced major challenges, which had destroyed larger and stronger countries, and today could look back and thank God for what had been done, as there were results to boast of.
Dr Gonzi questioned why Dr Muscat had failed to mention that Malta would no longer have to go through the excessive deficit procedure, even though this came through two days before his parliamentary address.
Dr Gonzi warned Dr Muscat he was playing with fire and with promises, such as the pledge to reduce utility bills.
He noted Dr Muscat had also stopped using Cyprus as an example since things went wrong there and it had to borrow over €17 million, increase VAT by two per cent and raise income tax from 30 to 35 per cent. Unemployment in Cyprus reached 12 per cent while in Malta it was seven per cent.
In the second quarter of 2012, the Cypriot economy shrunk by 2.4 per cent and its deficit was 6.3 per cent of the GDP.
Malta’s deficit would be reduced to 1.7 per cent. To stimulate economic activity, the Government planned to reduce stamp duty for those who were purchasing their first home. It had given more than €200 million in tax credits that generated more than €500 million in the past four years.
The Government enjoyed four years of success in tourism notwithstanding the Libyan crisis and Air Malta’s problems. Since 2008 tourism had risen by 11 per cent, bed-nights by 13 per cent and tourist spending by 27 per cent.
It would reduce income tax from 35 to 32 per cent in 2013, to 29 per cent in 2014 and to 25 per cent in 2015. The Government had also cut income tax for working women. It was projecting an increase in revenue as there would be a higher number of employed. Speaking on the minimum wage, Dr Gonzi said that a single person who earned the minimum wage would be subject to maximum income tax of €67 per year.
But a minimum wage earner who attended courses to improve his skills would receive €25 per week: a total of €600 in six months.
Consequently, a minimum wage earner who was single would be paying €67 while receiving €600. Students coming from a minimum wage-earning family received a higher stipend.
Dr Gonzi gave details on family-friendly measures giving mothers incentives to work while raising the children’s allowance and maternity leave and paying lower income tax. Expenditure on children’s allowances increased from €635 in 1998 to €710 per child this year when the number of children also fell from 73,000 to 59,000 over the same period.
He said the legislature was dominated by investment in public and private education, with €196 million given to Church schools, €108 million in stipends, €186 million to Mcast and €212 million to the University. Some €6,000 was spent on each child in compulsory education; 2,800 children in government schools were helped by Learning Support Assistants.
Last year, those continuing their studies after secondary education increased from 43 to 82 per cent; 10.6 per cent of Maltese youth did not continue their studies or entered into training when the European average stood at 12.9 per cent. This meant that Malta had exceptional human resources making it possible for the country to expand in economic terms.
Dr Gonzi accused the PL of being populist and asked whether a Labour government would cut education and health budgets to sustain its electoral promises.
There had been vast investment in health, including the oncology hospital, increased free health services and free medicines given to 100,000 patients. Other measures benefited disabled people.
The Prime Minister told farmers, breeders and fishermen they could still succeed despite challenges. They benefited from €85 million and €15 million respectively from national and EU funds.
He also mentioned initiatives in the environment and the infrastructure highlighting the project aimed at having the cleanest sea in the Mediterranean.
Turning to Gozo, Dr Gonzi said the island benefited from 10 per cent of all EU funds. The solution was more job opportunities for Gozitans in Gozo and he promised the underground tunnel between Malta and Gozo would be carried out if geological studies showed that this was possible. This would provide jobs for Gozitans.
While thanking the electorate for remaining united through the financial and economic crises and North African revolutions, Dr Gonzi called on voters to make a responsible choice – built on courage and wisdom.
For a full report on the speech see www.timesofmalta.com.