20 September 2014

Parliament Reconvenes after the Easter recess: Government and Opposition lock horns over budgetary measures

 - Wednesday, 25 April 2012, 00:00

by Keith Micallef

Government and the Opposition expressed totally divergent views as the debate regarding the Budget Measures Implementation Bill dragged on in Parliament during the first plenary session following the lengthy Easter recess.

The debate is set to continue this morning at 9am after the House adjourned on Monday evening with no session being held yesterday, while the vote on this crucial money bill has been scheduled for 9 May. By law this bill has to be approved five days later – exactly six months after budget day.

During the debate, the Minister for Justice, Public Consultation and Family, Chris Said, remarked that some of this year’s budgetary measures have already been implemented. The €300 annual grant for those aged 80 and over who are living at their own home or with their families is just one example. He said that job creation will remain of utmost priority for the government as coupled with economic growth this was the best tool for social cohesion. In his speech, he said that the minimum wage has increased by €1,000 annually since 2008, and 20,000 jobs have been created in the same period of time. Dr Said claimed that the Opposition was mixing up engagement forms and new jobs in its criticism.

The Justice Minister bragged about the government’s record in the stipend system while reminding of Labour’s track record in the 1996-98 administration which imposed loans instead of grants.

Regarding the current economic situation, he said that the news coming out from Eurostat was rather positive and this confirmed the government’s positive outlook which had projected a decrease in the public deficit for 2011.

Thus, government was in a position to sustain and increase the welfare state. In particular, Dr Said mentioned the financial aid to foster parents which increased from €600,000 to €2 million in just four years while those most vulnerable are being looked after with special measures. Amendments in the Social Security Act were also enacted by Parliament earlier this year with this intention.

Referring to remarks made earlier by Labour MP Gino Cauchi regarding the €40 million budget cuts, Dr Said explained once again that even after this downward revision, the budget expenditure still exceeds that of 2011. In the social sector alone, there is an increase of €24 million. He said that the government actually increased funds for the Foundation of the Social Welfare Services in spite of what is being claimed by the Opposition

He also referred to the work being carried out by the Housing Authority through which 5,288 benefited from subsidised rent rates in the past four years. Other efforts which the Housing Authority is embarking on are to enable tenants to become home owners, following the government’s decision to address and compensate those involved in the issue of the Possession and Use Act of 1948.

In his speech, Dr Said referred also to the International Monetary Fund (IMF) report which estimated Malta’s economic growth rate for 2012 at 1.2%, which is still the third highest in the EU. He questioned Labour’s promises to reduce the energy tariffs, especially the way they would impinge on the credit agencies reports about Malta.

Another positive economic indicator is the unemployment rate which currently ranks among the lowest in Europe. At the same time, the government took steps to alleviate some of the financial burdens such as the reduction in income tax from which 55,000 parents are benefiting. Regarding the elderly, he said that the old age pension has increased by about €1,000 annually since 2008. He concluded by announcing that in the coming days the Attard local council will start serving also as a Social Security district office for the benefit of the residents.

Government MP Philip Mifsud highlighted the fact that every budget aims also to implement various aspects of government’s electoral programme. He added that the budgetary measures have to be planned in the context of the international situation. He accused the Opposition of ignoring the international situation on purpose and treating the facts in isolation. In spite of all, the government was delivering and meeting its targets. Dr Mifsud concluded that these positive results are a direct result of good governance and wise decisions which contrast sharply with the Opposition’s non-existent policies.

On the other hand, Labour MP Gino Cauchi claimed that Parliament is right now in crisis and this is being reflected in the general public perception. He referred to the long Easter recess and said that the feedback he is getting from house visits is rather negative and indicates the citizens are losing trust in the country’s highest democratic institution. He recalled that in early 2011, this respective bill was still being debated in January, two months after the budget was announced, but this year matters got even worse with the debate still dragging on after almost six months. He described such a situation as ridiculous and said that the six-month timeframe by law needs revision.

The Labour MP listed several important developments which took place since budget day including the €40 million cuts which according to him rendered it virtually obsolete. Another significant development was that government lost its parliamentary majority, and is thus adopting delaying tactics to avoid potential embarrassments and cling on to power as much as possible.

He claimed that in the first two months of the year the government failed on all targets citing public debt as a primary example which according to him increased by €220 million – a divergence of €162 from the government projections. Recurring expenditure also exceeded the estimates suggesting that this was due to the power of incumbency amid speculation of an early election. Mr Cauchi accused the government of losing control of the public finances in an attempt to remain in power. He backed his arguments by quoting NSO figures.

On a point of order, Finance Minister Tonio Fenech replied that Eurostat, a few hours earlier, had confirmed the 2.7% deficit for 2011 which was even 0.1% better than the government’s projections.

The Labour MP said that the Opposition had immediately warned that the budget projections were unrealistic and have been now rendered obsolete. He criticised the budget cuts across the board which were only revealed due to Labour’s insistence. He suggested these cuts were dictated by the Ministry of Finance as some do not make any sense at all.

He cited the Malta Tourism Authority’s budget which was reduced by €1.4million from €28.5 million and the reduction of €1 million from the church schools’ allocation. Worst of them all was the Health Minister who claimed that €7.3 million were given back to the Finance Ministry as they were deemed as surplus. On the other hand, €233,000 was allotted to the E22 channel which was closed down in April 2011. For some reason, even after the revision was announced this financial allocation was only reduced by €3,000 in sharp contrast with drastic cuts in more sensitive areas. This suggests that the budget cuts were decided by the Ministry of Finance by simply reducing 10% across the board.

Mr Cauchi also criticised the increase in gas and fuel prices and questioned who will really carry the brunt of the increase in Enemalta’s ever-increasing recurrent expenditure to buy fuel. He said that even the IMF vindicated Labour’s position about the economic growth which only stands at 1.2%. He concluded that the Maltese taxpayers have to cope with a daily bill of €600,000 to service public debt.

Labour MP Noel Farrugia, who was in possession, opened the debate. He claimed that government is missing its targets set out in the budget and that somebody must be held accountable. Mr Farrugia bragged about the state of the public finances left by successive Labour administrations from 1971 to 1987 which he said was in the region of a Lm300 million surplus. He claimed that the current administration is not operating in a sustainable manner and this is also impacting negatively on the standard of living with the cost of living soaring.

During Monday’s sitting the first reading of the Guardianship Bill, aiming to introduce a system for disabled people needing support to manage their affairs, was approved.

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