While the government had a debt of €5 billion, its people were rich with nearly €10 billion in bank deposits. Finance Minister Tonio Borg said yesterday during the Budget debate it was clearly the case of Gvern Midjun, Poplu Sinjur and it was no wonder that global rating agency Fitch felt comfortable that most public debt was held locally, and the financial sector was a large purchaser of government debt.
Bank deposits had stood at €8.5 billion in 2008 and increased to €8.6 billion last year and €9.1 billion up to the end of August.
The European Commission had praised Malta and Estonia for being the two EU countries which had managed to decrease their deficit. He said that the economic crisis had an impact because government revenue had decreased.
In this scenario, the government could not introduce the promised cuts in income tax. The Nationalist government had, for the previous three years, cut income tax which put €154 million per year in people’s pockets.
Oppoition leader Joseph Muscat had said that a couple earning €28,000 had lost €200 in income tax but, the minister pointed out, during the previous three years it had gained €1,056. Likewise a couple earning €55,000 had €4844 more to spend and a couple earning €55,000 had saved €4,844 in income tax over three years.
Contrary to what the opposition said, people were feeling the benefits accrued from previous budgets. Hundreds of workers in 15 factories who had been working on a four-day week were now working a seven-day week making money through overtime. These companies were to expand and increase jobs by another 300.
Online gaming left a lot of profit with the sector employing 5,200 people. There were 4,666 new businesses registered in 2009.
Jobs in the retail industry also increased by more than 250 this year when compared to 2009. Other sectors also registered increases.
Mr Fenech said this surely was not all gloom and doom.
The Budget aimed at giving incentives to increase exports and improve quality. Initiatives taken in previous budgets were still in operation.
Referring to the control of public expenditure, Minister Fenech said that the budget included measures which were implementing recommendations made by the Auditor General.
He said that if the government took heed of the opposition’s suggestion to cut operational costs by five per cent, it would have meant cutting the Budget for education and health slashing allowances for doctors, nurses, paramedics and teachers who benefitted from €42 million in allowances.
The government spent an overall €79 million in allowances. These did not include allowance paid to ARMS Ltd management which did not come out of the consolidated fund.
Mr Fenech said that some national projects promised in last year’s budget speech had not yet started because of processing issues including Mepa permits and award of tenders. However the aviation park at Safi for SR Technic, with an investment of €17 million, was operational.
He referred to the credit card factory which closed down in Gozo and said that the government was not happy with the situation. This was one of the projects which had not taken off. However, the government, through a court order, had stopped the investor from moving the equipment to Sicily where he intended to continue production.
Minister Fenech concluded that the Budget’s objectives were to safeguard jobs, and continue to invest in sector which would guarantee the country’s future.
Parliamentary Secretary Jason Azzopardi said that the government had paid €9.3 million in compensation for land expropriated before 1994 and another €2.25million for land expropriated after 1994. These showed an increase of €4 million and €1.4 million respectively over last year. He said that the issue of another eight parcels of land in the Cottonera area, taken by the government under the possession and use clause, had now been settled benefitting 380 families who were being encouraged to buy the property. Another €1 million had been paid in compensation to owners of land expropriated by the government in the 70s and 80s. A further 227 families, who had been living in units on a promise of sale in Rabat, Sta Lucia and Gudja could now conclude the contract of sale with the Housing Authority.
On small and medium enterprises, Dr Azzopardi said that this year there 222 such companies which received EU grants amounting to €14 million enabling them to increase their operation. The Malta Enterprise had concluded 20 agreements with other government agencies in preparation for the opening the one-stop-shop.
Nationalist MPs Ninu Zammit and Robert Arrigo also contributed to the debate.