That the rate of inflation was so low was indicative of a declining economy since it was evidence of price slashing with sluggish consumption, said Shadow Finance Minister Tonio Fenech. Photo: Chris Sant Fournier

Shadow Finance Minister Tonio Fenech criticised the government for not producing any concrete job creation plan and for doing its best to “hide” unemployment, in sharp contrast to what it had stated before the election.

Speaking during the debate on the Budget Measures Implementation Bill, Mr Fenech said that if the government did have a plan, then Labour was not working. No one denied that the economy was still creating jobs. However, the Opposition maintained that job creation was not meeting the demands of an evolving society.

Unemployment was effectively increasing and while the situation was not in crisis mode, the writing was on the wall. This was still an issue for those who were looking fruitlessly for a job.

Mr Fenech said that the financial, gambling and administrative sectors were still growing. Other important sectors such as construction were shrinking. One sector had grown considerably: the public sector. This was diametrically opposed to the trend under the previous administration which sought to reduce the public workforce and increase efficiency.

Away from the hype of PR, a tangible strategy had yet to be revealed

There was a difference between a job plan and a roadmap, Mr Fenech said.

The government could not hide behind the country-specific recommendations made by the EU since it should have its own agenda. He cited previous plans on life sciences, tourism and information technology as examples. He said that away from the hype of PR, a tangible strategy had yet to be revealed.

The greatest challenge in the coming months was how much Malta could harness the wind of positive economics worldwide. He said the fact that the rate of inflation was so low was indicative of a declining economy since it was evidence of price slashing with sluggish consumption. The reality was that sales over Christmas were not good.

More crucially, areas relating to exportation were suffering and several exporting companies were in serious difficulties. He criticised those shop stewards who endangered the jobs of the workers through bullish partisan behaviour, when even the government was concerned with the situation.

Mr Fenech said if Malta Enterprise was not on the ball, jobs would be lost and would be difficult to get back. Multinationals could easily relocate and when the world economy recuperated, Malta would be bereft of these companies and all it would have left would be the Individual Investor Programme.

The deficit increase over 2012 became all the more worrying when one looked into the reasons behind it. It was not increasing due to one-off expenses but due to other things such as an increase of over €21 million in salaries.

This caused one to question what sort of financial situation this government was placing the country in, as effectively there was no room to reduce expenditure. Salaries could not really be reduced, at least not without making employees redundant.

The Finance Minister had said he was satisfied to have reached the €180 million target with the Consolidated Fund, as the €100 million owed by Enemalta were not being counted and this meant the fund actually stood at €280 million. This was just playing with words, Mr Fenech said.

Although Edward Scicluna had said the €100 million was what Enemalta owed for the past two years, if this had been included in last year’s accounts Malta wouldn’t even have been placed under the Excessive Deficit Procedure. The deficit improvement was only down to a one-off €65 million payment from the EU, which was even more worrying.

It was now a question of waiting for the final figures, to see how the government planned to continue reducing the deficit. This promised to be quite a wait, particularly in view of unexpected expenses on the horizon, such as the decision to nationalise the transport system. He questioned whether the government regarded this as an opportunity to create some jobs.

Mr Fenech said that from projections, it was already clear that the expense on transport would at least double, with the government paying out over €2 million in subsidies each month. He hoped it wouldn’t make losses comparable to those sustained by Arriva, as these would come out of people’s taxes.

Taking a look at the debt, by the third quarter it would have increased by €500 million, which confirmed that Enemalta’s €100 million was not included in the consolidated fund. Effectively, debt should only increase by the consolidated fund’s deficit.

The European Commission had warned the government that the situation was not good and gave it two years to rectify matters, he said. Figures published indicated that there were problems.

Even though gas prices were the highest in recent years, the Minister justified this by saying that prices had previously risen every month, but now they were fixed for three months. The General Workers’ Union had kept mum on this matter, he said, even though it had protested when prices were lower. The same was true for fuel prices.

Mr Fenech said he would also have expected the government to explain some measures included in the budget, such as the new tax on dividends received from companies listed on the Stock Exchange and the flat tax rate for all rentals, which in reality only applied to property rented for residential purposes.

The ongoing debate on the citizenship scheme could have been avoided, he said. Despite claims that it would be listening and taking feedback on board, the government published a Legal Notice on Christmas Eve that made it clear even the Malta Council for Economic and Social Development had not been consulted.

It was sustainable jobs that were important. Though the Prime Minister tried to give the impression that he had brought in €1 billion, citizenship was not for sale and not for him to sell it.