AD's Budget recommendations

Alternattiva Demokratika yesterday said it believed Malta should adopt the euro in 2008, two years after the deadline Government was suggesting.

AD believes this should be done so that the government would not have a tight deadline and "ends up suffocating the economy" by the measures it would have to take within a smaller timeframe.

AD yesterday presented several recommendations for the next budget and called on the government to set its priorities right and to assume political responsibility for the dire state of the country's finances. It also urged Government to wage war on tax evasion.

AD's spokesman on finances, the economy and tourism, Edward Fenech, insisted that the reduction of the deficit should be the main fiscal priority.

"As a responsible party we are refraining from the political opportunism of calling for a wide tax reduction. On the other hand tax revenue should grow at marginally less than the forecast nominal rate of economic growth. The government should commit itself not to introduce any new taxes on income and economic initiative," Mr Fenech said.

AD said wages, welfare payments, health care and education must grow in line with inflation so that the purchasing power would not be negatively affected and there will not be a negative impact on those depending on the State. On the other hand abuse in welfare should be combated and definitive and cross-party agreed measures should be introduced to combat the black economy, he said.

AD also called for devising a medium term capital expenditure budget at MCESD level together with the addition of local council representatives.

"In the light of the present dire situation the government should exclude any extravagant and unjustified expenditure such as the proposal to build a new parliament on the opera house site," AD said.

AD also commented on the costs involved in the construction and eventual operation of the Mater Dei Hospital, saying that in the next budget the government should not only declare how much the hospital is going to cost but also how much it will cost to operate, over and above what the country is spending now.

AD reiterated its recommendations on promoting alternative energy and proposed the setting up of an energy auditing unit which would offer advice to businesses and household on the best way to reduce energy consumption and costs.

Mr Fenech argued that Enemalta and the Water Services Corporation should issue bills on time and if any tariff increases are on the cards, these should be devised in a way to penalise those who waste, not those who use electricity and water responsibly.

AD also called for a lower company tax rate for SMEs, arguing the government can make up for the drop in tax revenue by stepping up tax evasion measures on abusers.

A major priority in the next budget should be that of promoting fiscal morality and combating tax evasion.

"The Government should have the political courage to tackle rampant tax evasion among those self-employed who are declaring very low income and possibly also taking social security benefits to which they are not entitled. AD will be fully supportive of any legal measures that government must take to tackle this problem. The MLP should do the same. While promoting fiscal morality the government should reduce unnecessary bureaucracy stifling the self-employed sector and SMEs," AD said.

AD is also in favour of channelling the Malta Tourism Authority's funds more towards product development rather than marketing.

Mr Fenech said the government should get its priorities right.

"In times of economic uncertainty it is wise to stick to the basics. This dictates that government considers shifting investment onto three areas that AD believes hold the key to future economic prosperity namely SMEs, Education and Tourism," AD said.

AD's chairman Harry Vassallo called on the Nationalist Party to assume political responsibility for the state of government finances.

"If our finances were in order, then government could have pumped more money into the economy to stimulate economic growth. The economic recovery the government dreams of has not yet arrived. The Prime Minister is still telling us that the economy is doing well because people have saved another Lm100 million. The fact that people are saving rather than spending damages the economy as this means that less money is circulating in the economy. Our country needs a fresh start. Malta and Gozo are yearning for change; a change for the better for all Maltese and Gozitan citizens," Dr Vassallo said.