Finance Minister Edward Scicluna yesterday acknowledged the environment was “unfortunately left out” of the pre-Budget document.
Prof. Scicluna was speaking during a business breakfast as part of the pre-Budget consultation process.
The event started with a brief presentation on the state of the economy and representatives of the business community, employers and social partners were then invited to give feedback.
Alternattiva Demokratika deputy chairman Carmel Cacopardo expressed concern that the “ecological deficit” and its impact on the economy was not mentioned.
One such example, he pointed out, was the “disastrous” state of the water table, meaning more dependency on other sources such as reverse osmosis plants, which were more energy intensive and, therefore, more expensive to operate.
“In this context, the flood relief project [in hand] makes no sense because it is channelling a precious resource directly to the sea,” he said.
Mr Cacopardo urged the government to rectify this omission. Similar concerns were expressed by Mary Gaerty, from the National Council of Women, who said the environment did not feature at all.
Prof. Scicluna said the idea of the pre-Budget document was to get feedback on a proposed fiscal and economic framework. At this point, he said, “the environment was unfortunately left out”. He did not elaborate.
This newspaper sought clarifications on his statement, including the reasons for such an omission. However, questions sent to the ministry remained unanswered at the time of writing.
When speaking about the state of the economy, Prof. Scicluna remarked that one of the “biggest stumbling blocks” for growth was traffic congestion.
The government had to think outside the box and see how it could reduce traffic because it was clogging economic activity and costing the country an enormous amount of money, the minister said.
Outlining the state of public finances and the government’s targets, Prof. Scicluna said the aim was to end the year with a 2.1 per cent deficit, which would be 0.7 per cent lower than 2013.
The next step would be to cut the deficit to 1.6 per cent in 2015.
This has to be put within the context of the fact the Labour government had inherited a 3.3 per cent deficit, which it managed to decrease to 2.8 per cent at the end of last year, he noted.
He acknowledged that such targets would pose serious fiscal challenges because economic growth would have to compensate for the reduction in government expenditure and borrowing.
In terms of tax revenue, he said that, between January and June, there was a shortfall of €12 million, mostly due to lower income from excise tax and duty.
On the other hand, expenditure soared by €35 million over the Budget estimates.
As a result, the government ended the first half of the year with an overall deficit of €47 million.
Prof. Scicluna also pointed out that Enemalta owed the government about €42 million, which would help to offset the deficit.