The same had happened with the Mater Dei hospital, he said. The opposition had criticised the project from the start and told the government not to sign the contract it did. However, he continued, the government carried on with its plan, and instead ridiculed the opposition’s criticism. “The Prime Minister cannot expect us to back him now on the hospital issue after we had been warning about this all along,” he said.
The government needs to work on an economic strategy that gives a clear direction, ensuring the future of social welfare, he said. Referring to figures released recently by the recent National Statistics Office, Dr Mangion said that the country’s economy was going from bad to worse.
The local economy has shrunk during the last quarter as it did throughout 2003, despite the fact that other economies are growing, he pointed out, announcing that the opposition will be presenting a motion in parliament to discuss the matter. In the motion the MLP will be calling for the drafting of an economic strategy.
Malta is possibly the only economy in the world to be contracting, he said. The US and China have experienced a four per cent growth, and while figures have been more conservative in the EU, the statistics are nonetheless positive, especially those of the newly acceded member states.
The government’s financial situation is a long way from meeting the Maastricht criteria, he said. The national debt amounts to 72 per cent of the GDP, when EU levels recommend 60 per cent. The deficit stands at 9.7 per cent while the EU stipulates a maximum of three per cent.
These figures exist despite the fact that the government’s revenue has grown from the increase of VAT to 18 per cent and the introduction of other taxes.
Dr Mangion emphasised that the situation is leading institutions such as the World Economic Forum to earmark Malta as a country on the decline with respect to its competitiveness.
Tourism is evidently going through a rough patch and the closure of hotels stands as testament to this fact, he said, adding that running costs have become too high for the sector, in tandem with a shrinkage of profit margins. Industry is facing a similar scenario, he continued. Of 10 categories during this year’s first six months, only two registered an increase in production, while the importation of industrial goods dropped by Lm23 million.
The government needs to address its expenditure seriously and set its priorities straight.
He said that five Nordic countries that are much better off than Malta, had bought a piece of property together, and will be using it as their embassy, bringing the cost down to Lm4 million per country. “This is not to say that Malta should have done the same, but it goes to show how cautious other countries are with regard to their spending.”
The government has embarked on a number of privatisation projects that were supposed to result in extra money for the government. He said that the Lm130 million the government will be making over 30 years from the Freeport privatisation will go to pay for the interests of the company’s debt, Lm105million, for which the government is paying Lm6.8 million a year.
The government should also offer an explanation regarding the E9 million that the Brindisi Freeport had lost last year, adding that now it seems that government owns 99 per cent of this company’s shares.