Government ministries would continue trying to cut back on expenditure so that it would be possible to reduce the deficit without increasing taxes, Finance Minister Tonio Fenech said.

“Each ministry is trying to make an effort to see where it can become more efficient without failing to meet its obligations and without increasing the burden of taxes,” Mr Fenech said.

In a brief comment after a three-and-a-half hour meeting with the Malta Council for Economic and Social Development yesterday morning, Mr Fenech said the government had also increased investment in various sectors, like education.

He insisted the government already implemented a substantial part of its promise to reduce taxes. “In the first Budget we reduced income tax – even in the last Budget we introduced a number of measures like the micro-invest scheme for small businesses.”

However, the upcoming Budget, to be announced on October 25, will not include the income tax cuts promised during the Nationalist Party’s 2008 election campaign.

“We have to substantially reduce the deficit not to face the same difficulties other countries are facing – it will not be possible for this Budget (to introduce income tax cuts),” Mr Fenech said.

The social partners put forward their Budget proposals and will explain them during a meeting this week, council acting chairman Godwin Grima said.

Dr Grima, who is also principal permanent secretary, stood in for MCESD chairman Sonny Portelli who was abroad.

However, the Chamber for Small and Medium Enterprises – GRTU, said in a statement it “expected government to prioritise on micro and small enterprises”.