PN spokesperson for Finance Jerome Caruana Cilia said that the recently announced Budget is a budget which does not address the challenges people are facing and is one without ambition and no long-term vision, lacking strategies and planning.

Mixed reactions unfolded following the presentation of the Budget for next year by Finance Minister Clyde Caruana.

Some said that it was a fair and just Budget given the current circumstances the country, and the world, finds itself in, while some criticised, describing the Budget as one which addresses the short-term problems, with no real planning for the future.

The Malta Independent on Sunday spoke with Caruana Cilia, who started off by saying that each Budget, regardless of which party is currently in government, has positive measures.

“What is positive, we say that it is positive. NGOs, constituted bodies and even the PN spoke up, put pressure on government and it finally seems that some positive measures will effectively be implemented, such as the additional Cost of Living Adjustment (COLA),” Caruana Cilia said.

He said that government also mentioned the ESG framework (environment, social and governance) in this Budget, which he said is the way forward for businesses and industries in the country.

“Despite Labour apologists having ridiculed the ESG framework, it seems that government has listened to us,” he said.

Caruana Cilia said however, that the salient point of this Budget is the major lack of long-term vision and strategies, when it comes to the kind of jobs provided for youths, which economic sectors and industry verticals will be created and which investments will be made in existing industries.

“We heard about none of this in the Budget, and ironically, the Finance Minister admitted that his economic model for the country, which he was the pioneer of, needs to change because it had failed. This is because of a lack of vision and planning. He had the opportunity to announce and explain a long-term vision particularly involving the economic model, but we heard nothing of this in the Budget,” Caruana Cilia said.

Government has not increased taxes, nor has it imposed additional taxes in the 2023 Budget. Caruana Cilia was asked if he would consider the Budget as a fair one, considering circumstances such as inflation and the recovery from the Covid-19 pandemic.

“This Budget does have positive measures such as subsidies on energy due to the impacts of inflation. If you remove these subsidies, the country will have a rate of inflation higher than the euro zone. Inflation in our country is 7.4%, one of the lowest in the euro zone but also an inflation record high for the past few years in our country. So, yes, we agree on the subsidies,” Caruana Cilia said.

He explained that during one of his home visits, he met a young man who had expressed his wish to leave the country.

“This is reflected in statistics, showing that Maltese youth want to leave the country for good. The reasons being are those which were not addressed in the Budget – lack of opportunities, the traffic problem, air pollution, lack of open spaces. The biggest challenges people are experiencing were not addressed in this Budget,” he said.

Caruana Cilia said that figures show that there was growth in the economy but asked if it was distributed fairly. He added that until the end of last year, Malta had the highest deficit from all the countries in the euro zone.

Caruana Cilia said that the gap between the rich and the rest of the population with regards to income inequality continued to increase – Malta has one of the highest rates of early school-leavers, the country has the lowest share of total students studying in tertiary education, Malta is the only European country that was grey-listed, one of the most polluted countries in air quality; had a huge turnover of educators and teachers over the past few years and income and living conditions also worsened and people cannot afford basic necessities or surprise expenses.

“We expected that more measures would be given to address these issues, to alleviate the weight of inflation and provide better pay rather than precarious work,” Caruana Cilia said.

He said that government must create new economic sectors and invest in existing ones, parallel to what the PN in government did in years of financial crises in 2008 and 2010. Caruana Cilia reminded that the PL’s electoral promise was to eradicate poverty.

Asked on the economic sectors, Caruana Cilia said that the way forward is to invest in existing economic sectors such as igaming and aviation, but government could also tap into the metaverse sector, as studies show that until 2030, the value of this sector will reach to around €5 trillion, possibly reaching up to €10 trillion.

“Business leaders are saying that the road forward is the metaverse and they want to make a high investment in this regard. PL apologists are ridiculing this sector and the Budget has not mentioned it. E-sports could also be tapped into, with a value of more than €300bn,” Caruana Cilia said.

He said that government must stray away from empty promises and “buzz words” such as the blockchain industry, which never came to Malta.

“Government must sit with experts and social partners and not persons with positions of trust. Months have passed since the country was removed from the FATF grey list and there was no mention of the way forward from the greylisting in the Budget,” Caruana Cilia said, adding that the Finance Minister had the golden opportunity to explain where government wants the country to go, but failed to do so.

On the revision of the COLA mechanism, Caruana Cilia said that the PN has spent the summer working and exchanging views with representatives of the Malta Council for Economic and Social Development (MCSED), something which government has not been doing.

He said that discussions are being held to perfect the COLA mechanism due to certain loopholes. In the original 1990 document, where it talks about extraordinary circumstances, it does not specify that a record-high inflation falls under those circumstances.

Caruana Cilia said that Unions had called on the Finance Minister to discuss the COLA mechanism.

“There is no dialogue, the Unions had to call on the minister themselves,” he said.

Hypocrisy can be a word to describe Clyde Caruana’s words in his Budget speech, where he said that government is spending within its means, yet the national debt continues to increase.

Asked about this, Caruana Cilia said that government cannot keep cutting from the aid given to the public but must stop squandering and wasting money.

“The Finance Minister said that some €200m in Budget cuts would be made in the Budget. In this context, you’d expect that the squandering and wasting of taxpayers’ money would stop. Not only did these cases and scandals not stop, but they continued to increase,” he said.

Caruana Cilia proceeded to mention scandals and cases of unjust direct orders, tenders and wasteful use of public money, all reported by the local media.

The Malta Employers Association (MEA) had also said in its reaction to the Budget, that government is addressing the short-term problems, but failing to provide a vision for the coming years, especially in the human resources sector.

Caruana Cilia said that government must implement strategies and proper planning, as well as a regulatory framework in training and re-skilling.

“Today before tomorrow, there needs to be a substantial investment in reskilling and training to show our youth the direction we are heading towards, so that they can effectively leave the precarious work and cheap labour and give them more opportunities for better paying jobs,” Caruana Cilia said.

He also said that there should be an institution focusing solely on training for trades.

A week after the announcement of the 2023 Budget, Opposition Leader Bernard Grech will give a speech on the Budget, giving also the PN’s proposals and views.

“We encourage people to follow the PN leader’s speech, who will not only criticise in an objective way, but give details on our vision, where we need to take our country,” he said.

“The crucial point is to give hope in these difficult circumstances; there needs to be a clear vision which leads to hope,” Caruana Cilia said.

He said that government has planned nothing and always manages by crisis, election to election.

“We want to offer hope to address the challenges which youths, workers, professionals and pensioners are facing,” Caruana Cilia said.