Malta Labour Party deputy leader Charles Mangion yesterday berated the government and its policies, which, he said, are leading to a higher cost of living month after month.

Speaking on Super One Radio, Dr Mangion said the rise in the cost of living and the accompanying higher inflation figures, are having a detrimental effect on Malta’s bid to join the euro on 1 January 2008 but, worse still, are also taking their toll on families, pensioners and Malta’s economic activity with the result that the country is becoming increasingly less competitive.

Stating that the source of cost of living increases did not originate overseas, Dr Mangion pointed toward government policies such as hikes imposed on water and electricity bills and rises in tariffs and taxes as being responsible.

Referring to recent statistics on public finances over the first seven months of the year, he stated that the government has slashed capital expenditure by Lm10 million with regard to tourism, the construction of factories, education and aid for farming, but added that through the measure, the government is merely postponing payments by a few months.

On public debt, Dr Mangion referred to the fact that over the first half of the year the government had netted Lm74 million through the sale of its shares in Maltacom, which should have gone toward reducing public debt. Statistics, however, showed that public debt had decreased by only Lm14 million over the period.

Turning to government revenue, where finances were boosted by national insurance payments, Dr Mangion commented that a good portion of such payments received were due to the settlement of arrears. While welcoming the retrieval of funds due, he stressed that these are merely one-off payments. He explained that increases in such payments were not achieved on the back of an increase in employment.

Dr Mangion recalled how some time ago, the auditor general’s office had said it is not in a position to assure that the government’s financial reporting presented a clear and realistic picture of the state of public finances. In this respect, he explained, it is vital that the public is made aware of the exact position of the government’s accounts.

The government, he said, has been speaking for the last 10 years about introducing a system of accrual accounting in which it would know exactly what its revenue and expenditure positions are, but, to date, no such system has emerged. Such a system, Dr Mangion said, would introduce an element of accountability into public finances where all would be responsible for their actions. Such an exercise, he stressed, should be carried out from the top down, and not the other way around.

The country, he said, is in need of a change if it is to move forward but such a change cannot be accomplished by “ministers who lack initiative and ideas”.

The MLP, he added, has such a plan for the country that involves the creation of wealth and the equitable distribution of such wealth.

Also speaking on the programme, MLP spokesperson for hotels and Air Malta Joseph Cuschieri called on the government to take the decisions necessary to bring the tourism sector out of the doldrums, where Malta is seen losing its competitive edge as a destination.

The government, he said, has been closing its eyes to the problems at hand and action must be taken immediately so as to prevent further damage to a sector so crucial to the country’s economy.