The Malta Independent 19 August 2019, Monday

Normal for government to have a deficit in first quarter – Muscat

Sunday, 14 July 2019, 11:50 Last update: about 2 months ago

It is normal for the government to record a deficit in the first quarter of the year, and the government will recover in the third or fourth quarter of the year, Prime Minister Joseph Muscat said on Sunday.

Speaking during his customary radio interview, Muscat noted that one must compare these figures to their equivalent from last year and said that certain people make him laugh when they try to make an analysis that does not take into consideration with like with like analysis.

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Last Monday, the National Statistics Office released figures which showed that the government had registered a €16.5 million deficit in the first quarter of this year.

Muscat noted that whatever the Opposition or so-called analysts say, the government can take consolation in the fact that people are living better quality lives and said that they will keep working to move people who are economically suffering into the new middle class that has been created.

Asked about Malta’s position on Libya and developing migration situation in the Mediterranean, Muscat said that Malta’s position is a “sensible” one and noted that Malta will continue to fulfil its international duties.

“If there are people sinking or at risk of dying in our waters, I will not let that happen; I am ready to defend that position without compromise”, Muscat said.

However, he added, the government was collaborating with the Libyan coastguard as part of their strategy, helping the coastguard intercept boats and take them back to Libya.

He then noted that there are other situations were Malta works to find a solution.  He made reference to a case where an NGO ship picked up migrants near Tunisia and wished to go into Italy.  Italy refused and asked Malta to allow the ship to dock there. Muscat said that he told Italy that the country was ready to allow the NGO boat to dock as long as Italy took the equivalent number of migrants from the country; a proposal which Italy accepted.

Muscat lamented that in any case, the NGO did not accept and pushed into Lampedusa anyway, but noted that finding solutions in such a manner created an element of good-will towards the country.

He said that this good-will is an advantage to the country, explaining a situation where – right after the AFM had saved 60 migrants – a German NGO boat which had saved 65 migrants began moving to Malta.

The European Commission and the German Government contacted the Maltese government, knowing that it was not the government’s responsibility, to find a solution.  When the government told the Germans and the Commission that they were ready to help the NGO ship but that none of the migrants onboard should remain in Malta, they both almost instantly replied that they would take all of them, Muscat said.

At this point, he said, Malta told these two parties that they would like a signal that Malta’s work is being appreciated, which eventually resulted in the German government pledging to take half of the 60 migrants who had been rescued by the AFM.

Turning onto the recently published rating by the credit rating agency Fitch – which gave Malta an A+ rating and changed its outlook from stable to positive – Muscat said that these reports reflect what Maltese people are experiencing.

Muscat said that under a Labour government the people’s quality of life had drastically improved. 

“We have created a new middle class which is being sustained and which will improve,” Muscat said.

He said that the government had inherited a generation which was feeling that its children were going to have more difficulties than they were, but that has now been reversed and parents are feeling like their children will be treated better than they were.

These same reports – such as the one published by Fitch – are important to attract more investment towards Malta, Muscat said.

International investors do not rely solely on what politicians tell them, but check what reputable and independent agencies are saying.

Fitch has reported that Malta is doing well but things will get even better, Muscat said.

Speaking about the financial services sector, Muscat said that despite the “assault” mounted by certain people against this industry, the sector had registered a 10% increase – something which he described as “no joke”.

He said that this growth had happened while other sectors continued to grow, showing that there was no over-dependency on this particular sector, before noting that there were over 12,000 people working in this sector.  He said that he was pleased to hear that students studying courses related to this sector were being offered employment contracts while they were still studying.

He said that there is controversy with this sector in any country, and referred to recent news that German banking giant Deutsche Bank had to sack 18,000 people following directives against it due to money laundering shortcomings.  He said that this is the situation of a developing and more controlling market, and noted that he was pleased with the work of the Malta Financial Services Authority as the regulator.

Speaking about the recently unveiled rent laws, which have now made their way through the second reading phase of Parliament, Muscat said that work had been ongoing on this reform for the best part of two years – from before the White Paper was launched – and noted with satisfaction that it had been passed unanimously in Parliament.

He said that even those who were not content with the reform know that it is a just one and a correct one.

Commenting about the State Advocate Bill, which also made its way through Parliament recently, Muscat said that this was a big reform that other governments should have done but never got around to doing.

He said that he could not understand why the Opposition had voted against it as they had been insisting on the implementation of this reform.  They said that they did not agree with it because it lacked certain parts – but at the same time they said that they wanted it implemented as soon as possible; making the package that the Opposition wants takes time, but it will be a part of future reforms, Muscat said.

 

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