The government will continue to implement an economic strategy that is bearing fruit in spite of the opposition’s misinformation campaign, which put investment and jobs in danger, the Finance Ministry said.

In a statement replying to a Labour Party news conference on the state of the economy this morning, the ministry accused the opposition of ignoring the positive international approval the Maltese economy had been given, following detailed evaluation by the World Economic Form and the credit rating agency Moody’s.

The WEF found that Malta had increased in competitiveness, a fundamental factor to attract investment and create employment, and remarked about the country’s advancement in the education sector and in infrastructure.

Moody’s praised the financial consolidation which it described as ‘successful’ and noted how important factors in the increase in government expenditure were due to aid given for the restructuring of Air Malta and for Enemalta not to increase water and electricity tariffs in spite of the increase in the price of oil.

The ministry noted that there were 150,000 workers who were gainfully employed and 20,000 new places of work were created in the past four years.

Statistics on economic growth published earlier this month showed a 2.6 per cent increase in wages when compared to the same period last year.

This was of utmost importance at a time when millions of jobs were still being lost in Europe with the latest Eurostat figures showing that unemployment in the eurozone had increased from 10.1 to 11.3 per cent.

This was also the fruit of the confidence international investors and Maltese businessmen had in the country.

Had there been the bureaucracy the opposition spokesmen said there was, Malta would not have managed to convince 160 industrialists to invest more than €350 million in new factories or expansions, creating around 3,700 new places of work.

Moreover, there would not have been nearly 2,800 businessmen who would have invested more than €160 million through the assistance given in several schemes including MicroInvest, MicroCredit and European funds for industry.

Such confidence was also due to the financial stability.

The ministry said that in the first half of this year, the debt level increased because €455 million worth of stocks were issued. This was 65 per cent of this year’s total, which could not exceed €700 million.

It also noted that, as the Central Bank had remarked, the statistics for the first quarter did not necessarily reflect trends. In the first quarter, government expenditure reflected support measures given to Enemalta and Air Malta, as well as additional investment where needed, particularly in the health sector.

The government, the ministry said, received most of its income in the last part of the year, especially value added and income tax.

The ministry said it was irresponsible of the Opposition to continue to give the impression that it was possible to play with figures when it knew that European requisites were very strict and figures were subject to continuous and detailed evaluation.

During this morning's news conference, Labour MEP Edward Scicluna said the government should come clean on its finances and not leave any surprises for the next government.

He said the PL would be holding the government responsible for its management of public finances.

Malta, he said, was the only country which still used a cash flow system, through which the government could hide any future payments.

“We want the government to come clean before the election so that there would be no surprises for the next government.”

Through this system, he said, the government could hide any payment due but which has not yet been made for the accounts to look nice.

The country, he said, should adopt an accrual based accounting system for commitments to show immediately, even before they are honoured.

Prof. Scicluna said the PL was also holding the European Commission responsible to scrutinise the government.

He said that at an EU level, he was proposing that the heads of national statistical agencies in EU states would be appointed by and be answerable to Parliament to ensure greater independence.

He said it was unacceptable to have major revisions in accounts. Giving an example, he said that while the NSO had originally a 1.3 per cent drop in economy in this 2009 statistics, this was revised to -3.4 two months later and it was then revised again to -2.6 per cent.

Revisions, he said, were too large and too frequent.

PL spokesman Karmenu Vella said that Malta had structural financial problems and the situation was going from bad to worse.

He said that for the government’s aims to be reached, the deficit for the whole year had to be €154 million. But up to July it had already reached €333 million. This was one of the government’s major failure records.

To reach its aim of a deficit of €154 million deficit, the government had to have a surplus of €180 million in the remaining months, which was next to impossible. He pointed out that the highest ever surplus in the last part of the year was of €40 million.

Mr Vella said that although the Finance Minister was still saying he was working to reach his aims, economists were concerned that not only would targets not be reached, Malta would not even meet the EU criteria of a deficit below three per cent of GDP.

Government’s cash flow, he said, was similar to what it had been in 2010, when the deficit had ended up being 3.7 per cent of GDP.

On the country’s debt targets, Mr Vella said the target was for the debt as a percentage of GDP this year to be 69 per cent. But according to the latest figures, this has reached 75 per cent of GDP. This was just the general government debt. Had the debt of all government agencies to also be considered it would go up to 86 to 87 per cent of GDP.

Mr Vella said that the negative GDP growth also helped in the escalation of debt and for the government to reach its deficit and GDP targets, it not only needed a surplus of €180 million surplus, but also a 4.6 per cent growth.

The current debt levels, he pointed out, were higher than the government targets for 2014.

Mr Vella said that it was also of concern that loans in the past three years had tripled. Interest had reached €230 million a year, nearly 10 per cent of the total tax revenue. Malta, he said, was paying €1.5 a day in interest and loans.

He asked whether the government had any plan of how this debt was to be repaid.

The government, he said, was cashing future revenue today, and deferred current payments to the future.

Spokesman Charles Mangion reiterated Labour’s belief that the private sector should be the motor of a sustainable economy. Figures for the latest quarter showed that, in spite of some growth, consumption had dropped for three consecutive quarters.

Wages in the past four years were down €715 in real term and this was being reflected in consumption.

Moreover, the government’s operating cost in the past six months had increased by €40 million.

Private investment in the past two to three years had been going down year to year, dropping by €300 million from 2008 to 2011.

Manufacture was also not growing and this could be seen in the GDP statistics.

Dr Mangion noted that in July and August, Malta’s inflation rate was among the highest in the EU - 4.2 per cent in July, 3.3 per cent in August, when the EU average was 2.2 per cent. This showed that the necessary convergence was not being reached in essential matters, he said adding that there was also an increase in the cost of the most essential stuff, such as food, health items and fuel.

Dr Mangion said that the government should reduce bureaucracy, control government induced costs, facilitate investment and address the skill mismatch problem without which there could not be economic development.