Labour leader Joseph Muscat insisted today that growth must come before austerity.

'No deficit reduction is sustainable without economic growth' Dr Muscat said at a political activity in Rabat.

He added that the prime minister was not being credible in his comments about a balanced budget since this was meant to have been achieved two years ago.

Dr Gonzi's political credibility was being further eroded when one saw how the government was spending beyond its means on matters which should not be the country's priorities, he said.

While families were finding it difficult to make ends meet, the only thing which the prime minister seemed bent to achieving was the opening of the new parliament.

One of the mistakes which Dr Gonzi was making, Dr Muscat said, was that he continued to view the PL as being solely a political party when it was now an instrument within a wider movement made up of people who were fed up with the way how things were being done.

In contrast to the single-issue movements of the past, such as the movement which led to EU membership, this movement was working for change but which would then continue to work to make Malta the best country in the EU.

One of its purposes was to distribute wealth in terms of a fair society, where those who wished to work were able to do so, and where the middle class did not work more to earn less, as was the case at present.

Dr Muscat reiterated the PL's proposals that social impact assessments have to precede major government decisions and homes would be provided in the community where persons with disability may live when their parents pass away.

He said current services would be retained and supplemented by new services in their community, including small homes in the community and new uses of homes for the elderly. The services should feature the participation of more NGOs as well as the private sector. The government would also seek better use of financial mechanisms such as funds left by parents in trust. Such funds would be tax free.

Dr Muscat said that the PL was not against capital investment, but only as long as this was productive. The new parliament did not fall within this category.

The Opposition leader said the fact that the prime minister had not appointed a new minister for home affairs and local government showed how he was a hostage to the problems within his own parliamentary group. He had assumed responsibility for such a vast sector because he did not want to rock the boat.

Dr Muscat reiterated the warning he made last Sunday that should it be re-elected, the PN would raise the retirement age, in line with calls by the EU.

He also again called for accountability at Bank of Valletta after last week's decision by the MFSA. The Authority's decision on mis-selling of an investment product was a serious matter . The government appointed the chairman of the bank and it was not enough to say he was a good man. Somebody had to assume responsibility. If nobody assumed responsibility it would be the politicians who made the appointments who would be held accountable, Dr Muscat said.

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