Prime Minister Lawrence Gonzi and Opposition leader Joseph Muscat crossed swords on Xarabank this evening in the first head-to-head debate this year.

Both leaders stuck to arguments they have been making for the past few months.

Dr Gonzi's opening salvo was an announcement that a large international manufacturing company was going to expand its Malta operation. He did not name the company or give details of the investment.

Dr Muscat criticised the high water and electricity rates, reiterating a pledge to lower utility bills if Labour is elected to Government. He did not say how this will be achieved and stuck to this line throughout the debate.

Pressed by the Prime Minister for the details, Dr Muscat said his party will unveil its election proposals on the same day Dr Gonzi will publish his election manifesto.

In a stunt to counter criticism based on a recent World Bank report that found it was difficult to do business in Malta, Dr Gonzi produced a raft of reports by various international agencies praising the country's economic performance.

The stunt, which involved a woman walking into the studio with bound copies of the reports, almost backfired when Dr Muscat asked the Prime Minister to hand them over to families who could not make ends meet.

Dr Gonzi acknowledged that the Nationalist Party's internal problems were worrying but insisted Malta was still a front runner in the EU despite the instability. He did not say when the Budget will be presented but insisted that if it did not pass the country will head for an election.

Nationalist backbencher Franco Debono has said he will not vote for the Budget as long as Transport Minister Austin Gatt was part of the Cabinet.

On health, Dr Gonzi defended the Government's choice of St Philip's Hospital as a rehabilitation facility, saying the prospective investment was worth it. Dr Muscat said the Labour Party had big question marks and stood to be convinced.

Dr Muscat accused the Prime Minister of breaking his promises on job creation at Smart City and cutting the top income tax rate with Dr Gonzi insisting the international economic situation complicated matters. Dr Gonzi said his Government defended jobs by helping factories in difficulty.

Answering a question from the floor Dr Gonzi said he was not at all satisfied with the Arriva public transport service but preferred the current bus fleet than the previous one.

His response elicited a jibe from Dr Muscat, who said half the fleet were second-hand buses from London, with reference to the bendy buses.

Dr Muscat said the Government's claim that it created 20,000 jobs was a fallacy not even repeated in the pre-Budget document published by the Finance Ministry.

Dr Gonzi insisted that on average 4,000 students graduated from University and MCAST every year and they all found jobs.

In two brief interventions, totaling some 10 minutes, Alternattiva Demokratika chairman Michael Briguglio took both parties to task for not being honest with people. He criticised the Labour Party for making a blanket promise to cut utility bills and for opposing an increase in the minimum wage.

Dr Briguglio criticised Dr Gonzi for voting against divorce in Parliament despite a positive referendum result. He said AD had clear social, economic and environmental policies.

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