The Malta Independent 20 November 2017, Monday

Watch: Scicluna says surplus and discretionary expenditure would cushion blow if economy turns sour

Kevin Schembri Orland Tuesday, 10 October 2017, 13:22 Last update: about 2 months ago

Finance Minister Edward Scicluna was asked by the Malta Independent whether government intends to reduce recurrent expenditure, and if yes how, given that such expenditure would be a concern if the current economic growth halts and turns into a downward trend, and in response mentioned two economic cushions.

Scicluna, and Deputy Prime Minister Chris Fearne were holding a press conference on yesterday's budget.

The finance minister mentioned that there are global, EU and local economic forecasts which government closely follows, to see what risks there are. "We always look at the risks in order to be prepared."

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Secondly, the minister said, there are two cushions acting as an insurance. "The surplus is a cushion. If for some reason things go wrong, the surplus would take the hit, not families."

He mentioned that a second cushion is in place - what he described as discretionary expenditure amounting to over €30 million. "This is not expensive we are obliged to spend." He said that government is prepared in case of such an event. In his answer, the minister did not mention what would be included in the discretionary expenditure.

Deputy Prime Minister Chris Fearne said that yesterday's budget eases people's minds, and doesn't add on any new taxes.                   

He said that when workers, students and pensioners see the budget, the only calculation they need to make is how much they will receive.

He mentioned that this budget is part of Joseph Muscat's project, which began years ago when he reformed the Labour party. This budget, he said, is based on the past budgets and prepares the country for the future.

"We can only have a budget which creates serenity due to the surplus," he said, adding that the country, without taking more funds from the people, can continue to create measures to improve quality of life.

This budget, he said, improves the quality of life by leaving more cash in peoples' pockets, mentioning changes to pensions and the minimum wage, as well as the COLA increase, and reduction of taxes.

He spoke about challenges that the budget addresses, mentioning traffic as an example. He said that this problem is partly caused due to the success of the country, mentioning measures such as free use of public transport for 16-20 year olds in the coming year, as well as free school transport for independent and Church schools.

Fearne spoke of the housing and rent problems, mentioning a whitepaper which, among other things, proposes that all rent contracts be registered. The budget also mentions measures for more social housing units.

Finance Minister Edward Scicluna said that the budget is strong due to the strong economy. "We must add that the economy is strong due to the good, planned budgets which were part of a roadmap."

There are 30 measures of dividing the economic benefits, he said, adding which they took into account people who truly are in need.

He also spoke of establishing an agency to deal with traffic, adding that it is not something that can be solved overnight. He mentioned the need for more car-pooling, and the need to reduce the use of private cars.

Asked about recent news reports that Barts CEO Armin Ernst left Vitals global Healthcare, the Deputy Prime Minister confirmed it, and said that a new CEO will be in Malta either next week or the week after.

He mentioned the partnership between VGH and Harvard, who sends professionals to help VGH run the Gozo Hospital. "These are things that happen, a contract expires and someone else comes in."

He said that there are 42 students who began studying at Barts Medical School. He said Harvard send professionals to help Vitals lead the hospital.  A new CEO is on his way.

Turning to traffic, and criticism that building more roads entices more traffic, the ministers explained that for public transport to operate properly, to create bus lanes etc. you need to have good roads. 


 

 

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