As Malta’s political parties continued their electoral campaigns in earnest yesterday morning, Prime Minister Lawrence Gonzi unveiled elements of the Nationalist Party’s economic stimulus package to be included in the party’s upcoming electoral manifesto.

While only a handful of the package’s contents were revealed yesterday, the main aim, according to Dr Gonzi, was to offer incentives and reward people for working more while at the same time stimulating economic activity across the board.

Among the electoral pledges to be enacted by a future Nationalist government and listed out by Dr Gonzi yesterday morning was an upward revision of the 15 and 25 per cent income tax bands and a reduction in the maximum 35 per cent income tax rate to 25 per cent for those earning up to e60,000 (Lm25,758) per year.

The latter measure, Dr Gonzi said, is to specifically benefit the self-employed and small businesses. He added that the government could be expected to recoup and better its revenue levels two years after the implementation of the income tax tweak.

“Following yesterday’s announcement (of the general election), this is the first occasion to present concrete proposals for this election,” Dr Gonzi observed at yesterday morning’s media briefing, hosted by Nationalist European parliamentarian Simon Busuttil at the Upper Barrakka Gardens.

The points outlined yesterday are to eventually become incorporated into the party’s wider electoral manifesto and are aimed at generating more quality employment while at the same time furnishing citizens with more disposable income.

As an additional means of enticing more women into the workforce, Dr Gonzi pledged a future PN government would extend current benefits so that mothers would be given a one-year income tax amnesty for each child they have – without needing to first resign from their jobs to claim the benefit.

Also central to the package was the retention of the overtime system in its current format, in which overtime is taxed but remains at time and a half pay. The government, Dr Gonzi added, was committed at EU level to ensure that the amount of overtime Maltese work would remain a matter of choice and without thresholds.

Dr Gonzi described this last legislature as having been particularly fruitful. Moreover, Malta’s EU accession has allowed Malta to also join the eurozone, giving Malta an added element of strength in times of global economic uncertainty.

Both milestones were achieved, he said, against the advice of the Malta Labour Party, which had merely been attempting to foster uncertainty in the country.

During the rigorous euro adoption process, Malta had not only met the demanding Maastricht criteria but the country’s real economic growth rate has also been faring well against that of Malta’s fellow eurozone countries, Dr Gonzi said.

Inflation, meanwhile, has also remained among the lowest in the EU and while some EU states had registered better economic growth figures than Malta, Dr Gonzi pointed out how such countries also had inflation rates well above those of Malta.

Dr Gonzi hailed the fact that the government had managed to achieve difficult fiscal consolidation – such as having reduced the public deficit from 10 per cent of gross domestic product as it stood prior to EU accession to today’s 1.7 per cent – while at the same time providing income tax breaks for the two years running, despite the austerity measures needed to meet euro adoption criteria.

EU leaders such as the presidents of the European Commission and the European Central Bank, Dr Gonzi said, had acknowledged Malta’s impressive fiscal feats at the recent commemoration of Malta’s euro adoption – far more credible voices than that of Labour leader Alfred Sant, who Dr Gonzi described as a “Jeremiah”.

The road to fiscal consolidation, Dr Gonzi said, has not been easy and challenges, most notably the international prices of oil and cereals, still persist. But, he noted, even though the current administration has grappled with what has been historically the highest oil prices in history, it has still succeeded in reducing the deficit.

By contrast, Dr Gonzi observed, when the MLP was last in power between 1996 and 1998, Malta was witnessing the lowest oil prices on record, but the country’s deficit had nevertheless exploded under its leadership. The current government’s policies, he added, on the other hand are to see Malta removing its budget deficit and creating a budget surplus as from 2010.

“This shows who is competent and who is not,” Dr Gonzi said.

Predicting that such international issues are expected to have a continued impact on the Maltese economy, he added, “What Malta needs is a government capable of finding solutions to these challenges, and not one that puts up smoke screens, experiments and breeds uncertainty.”

Such experiments, he said, included Dr Sant’s failed bid to devalue the Maltese lira, which, according to Dr Gonzi, would have rivalled the economic disaster created when Labour substituted VAT with CET – leaving in its wake a record deficit and a cost of living the likes of which Malta had not seen before.

Citing current statistics, Dr Gonzi hailed the fact that Malta has never had so many gainfully-occupied workers on the books, while Malta’s unemployment figures are also below EU averages – a fact that contrasts with Labour’s views on the matter, which he described as a “voice in the desert”.

Foreign direct investment levels were also at record highs last year, Dr Gonzi recalled, with the government only yesterday signing a new agreement with CMA CGM to invest a further e130 million in the Freeport and create 500 new jobs.