Prime Minister Joseph Muscat has delivered his official speech following the 2017 Budget reaction from leader of the opposition Simon Busuttil, where he revealed a Memorandum of Understanding with Bank of China and an international travel service called Beijing Caissa that will bring 10,000 tourists to Malta by 2018, and 50,000 until 2020. He also adressed a number of criticisms levelled against him by Dr Busuttil.
Responding to questions put forward by opposition leader Simon Busuttil that were made in Parliament yesterday, Dr Muscat said he firmly believes that the vast majority of Maltese and Gozitans are better off today than they were three and a half years ago.
“Every person in Malta can come to their own conclusions about this government. Is this country heading in the right direction?” he asked.
“There is consensus that the country is moving in the right direction.”
He said that this government sympathises with all those who are facing the daily grind, living on lower levels of income, adding that this country is in the middle of the road when it comes to raising the standard of living for all.
“Our aspiration is that after a year and a half, they will be living even better than they are today. We want to assure prosperity for all, and not for the few.”
“It is not just Standard and Poor’s that gave us an upgraded our rating, but also the Maltese and Gozitan families,” he said.
He said that it is no longer time for just concentrating on creating new work, but improving the type of work available and the conditions.
Dr Muscat referred to the provision of children’s allowance two weeks before schools started in order to help them out at a crucial moment.
He said that it is useless to give people rights if it is just on paper, speaking about the high number of women who have entered the work place.
“Giving people, such as women, independence in practice translates into giving then financial independence and options to choose what they want out of life.”
Dr Muscat spoke of how the previous administration said that the out-of-stock medicines problem was unsolvable – “but this government solved it!”
These are the results of tough decisions taken by this government, a government that is not afraid to tackle the bull by the horns, he said.
Tackling the issue of benefits abuse, he said this government continued to take tough decisions, possibly at the cost of votes, by striking social benefit abusers off the list.
“We are proud to have been the government to bring into force civil union and gay adoption,” he said.
We did not just change the direction of Malta, but also of the budget by spreading prosperity to all.
He assured the public that the measures delivered by this government will continue to be delivered for years to come.
Criticising the previous Nationalist Party administration, he said the situation in Malta was very different, with things deteriorating rapidly.
On issues of public finances, he slammed the PN for increasing public debt, the government deficit and the stagnating GDP.
He quipped that Dr Busuttil must have created some new economic theory, because of the opposition leader’s statement that public debt is not calculated on percentages.
A total of €7 million is going to be saved through interest as a result of the reduced public debt, he exclaimed.
Dr Muscat said that people’s concerns do not relate to the direction Malta is taking, but on their quality of life. Opposition leader Busuttil was blasted for being overly critical, with Dr Muscat saying that even when things are going well, the opposition continues to act like a wet blanket.
Dr Busuttil slammed the government for publishing the implementation report of the budget measures yesterday in parliament, Dr Muscat picked up that very report and asked Dr Busuttil how it was possible to miss such a big booklet.
“In the first year, we created jobs, in the second year we made work pay and now this third year we have distributed wealth and helped those who are genuinely not keeping up with life. This is the biggest movement of wealth redistribution and wealth generation in Malta’s living memory. This budget took from nobody and gave to those who needed it.
“There is one description for this budget: a social budget. I am not content with just creating wealth, but seeing that it is delivered to all. There is genuine criticism to be made, but I cannot understand some other points that were raised.”
He made reference to the budget measures where those on minimum wage, together with the cost of living adjustment and supplementary benefits will be receiving €4 more per week, saying that this is unprecedented.
He also made reference to the removal of income tax on low-pension earners. Turning to minimum wages in Malta, Dr Muscat said that very long discussion have been made on the issue. he said that the government feels that the current minimum wage is not satisfactory to keep up with daily life. He spoke of discussions with social partners and called for a genuine and meaningful discussion on whether to raise minimum wages.
“I am convinced that if this government does not do it, it will never happen. I understand the arguments of the employers and the unions – let us find a minimum road. This government believes there should be a raise, so let’s have an honest conversation where the pros and cons are made known. “
He spoke of the pension reforms, lambasting the PN for not raising pensions for a total of 25 years.
Pensions of up to €13,000 for single persons are no longer taxed, and tax on dividends has also been removed.
Dr Muscat then spoke about the means test changes proposed in the 2017 budget, where the threshold was changed in order to assist more people who are genuinely in need.
He then turned to the allowance adults will be getting who choose to look after their elderly parents, in view of “the service to society” they are carrying out.
“We doubled the subsidy for rents, reaching a maximum of €160 per month. It cannot be that the government subsidises a person’s rent, and the home-owner does not declare their rental income. We want to incentivise people to live honestly, but we cannot allow property owners to profit off tax payers.
“With these measures in place, how can you not be in favour of this budget?” he said.
Addressing criticism about the €50 million social housing project that has featured in last year’s budget as well as this one, Dr Muscat said that it is not so simple
Our target is that in three years every boy and girl under 16 that lives in a low income family, none of them will be living in poverty. We administered a fund to help children in need, and not buy giving them lunch in class in front of everybody, but in a way that gives them dignity.
Dr Muscat blasted the PN for having such a negative attitude on the Caritas poverty report. He quoted from the report:
“The minimum essential budget for a decent living is achieved.” He also outlined a number of expenses, such as gas, food and electricity that have gone down – more so for those at risk of poverty due to the added benefits they receive.
He cautioned against politicising Caritas, however he went on to quote the social support entity's official reaction to the budget:
"This budget speaks for the little man. This is just the first step, and I think this is the budget that needs building on, with measures building on the ones we saw today. We need the government to intervene because economic growth alone will not help the vulnerable."
Caritas cautioned against rising prices of food, but praised the pension reform. Dr Muscat we welcome this praise and this criticism, all with the aim of helping the most vulnerable sections of society.Listing a number of in-work benefits, and how allowances have improved following this budget, Dr Muscat said that "this is the way to build a new middle class".
Criticising Dr Busuttil's statement where he said that the government should introduce the second pillar pension system, which forces employers and employees to make private pension contributions.Dr Muscat said that this is in effect increasing social security payments.
"Dr Busuttil made some cardinal errors in yesterday's speech. He demanded more medicines, when his party should have ensured there were no out-of-stock medicines. He criticised this government's use of generic medicines, but he fails to understand that the sustainability of Malta's health system depends on generic medicines which are of the highest standards."
"Dr Busuttil wants to know about Vitals, but I do not have to tell him, he can ask Albert Fenech," Dr Muscat said.
Vitals is the company who won the tender for the privatisation of St Luke's hospital and Karen Grech. Mr Albert Fenech was the head of cardiology at Mater Dei hospital and a Nationalist MP but resigned from parliament after believing that he was forced out of his position. He is now reportedly working with Vitals.
Turning to Dr Busuttil's criticism about blank pages from the Vitals contracts recently published by government, Dr Muscat spoke of the Luquigas and Malta International Airport contracts that contain clauses which preclude them from being published in their entirety. He said that while he is not casting doubt on these contracts, it shows that Dr Busuttil's claims of corruption hold no basis in view of previous practices in Malta.
Dr Muscat proudly announced that there are currently only 18 youths that are dependent on benefits.
Two Memorandum of Understandings signed
Dr Muscat announced that two Memorandum of Understanding with the Bank of China and an international travel service called Beijing Caissa that will bring 10,000 tourists to Malta by 2018, and 50,000 until 2020.
Had we listened to the opposition leader regarding electricity prices last September, we would have had to increase electricity prices for this budget by 50 per cent, Dr Muscat said.
He then turned to the LNG tanker issue and the new Electrogas power station. Dr Busuttil yesterday quoted the cost of buying all the electricity from the new Electrogas power station versus a combination of the interconnector and the BWSC station.
“What Dr Busuttil failed to do is factor in operational costs, congestion costs and a number of imperative expenses. How could you trust these people (the PN) to govern?”
Dr Muscat quoted a London School of Economics report where it said that the interconnector would not necessary reduce the cost of electricity for the consumer and fails to ensure a stand-by stock of electricity that is so necessary for any government to have.
All Labour MPs slammed their hands on the table chanting “shame” towards Dr Busuttil after Dr Muscat quoted PN documents that say cheap electricity will lead to high levels of waste.
This prompted Independent MP Marlene Farrugia to call across the room to the Prime Minister, asking him whether he has no shame, followed by a statement which was inaudible over the slamming of desks by the MPs.
Dr Muscat questioned the reasoning behind Dr Busuttil’s criticism of the LNG tanker berthed in Marsaxlokk bay. He said that the tanker is equipped with state of the art technology, made reference to an EU law passed in favour of gas and also said that we should close the airport because planes are also dangerous.
On concerns of corruptions, Dr Muscat said:
“What annoys me most is that the good this government has done will be overshadowed by situations where the persons involved should have known better.
On the criticism that nobody was held responsible for Panama Papers, although he stopped short of saying Panama Papers, he said that on the oil scandal which took place under the previous administration, “everybody got off scot free”.
On a number of arguments raised by Dr Busuttil, Dr Muscat said that people agree with him, but they do not place their trust in him because he personally lacks credibility, more so within the current political context.
Dr Muscat called the opposition emotional terrorists against the most vulnerable people of Malta and Gozo, and said:
“The people expect better of us (the government) but they do not expect anything from you (the PN/opposition).”
On the issue of traffic, Dr Muscat conceded that the number of cars added to the road each year means that a serious action must be taken.
Dr Muscat said that instructions have been given to his ministries not to build on Outside Development Zone land, as though this could be permitted at any stage, it is unacceptable that a private person applies to build on ODZ that is not his. He said that the Environmental and Resources Authority is there to correct such grievances which have taken place in the past.
It is unclear how the concession of the American University of Malta to be built on ODZ land at Zonqor differs from the situation he described.
Dr Muscat concluded by repeatedly asking who the people trust with the economy, with the quality of life in Malta, with the distribution of wealth and with the future.