(Adds government's reaction)
Financial statistics for January and February confirmed that the government was falling behind in taking the promised initiatives to stimulate the economy, Labour Party spokesman Charles Mangion said.
He said in a statement the government had also failed to propose a stimulus package and projections announced in the budget were not being implemented.
But the government said in a reaction it was evident that the Opposition did not have any serious proposals on how the country could attract more investment to Malta to increase jobs and wealth.
Dr Mangion said that according to the statistics, the government reduced capital expenditure by €15.2 million in January and February while the deficit exploded to €200 million. This was when in the last budget the Finance Minister had announced an investment of more than €320 million to spread wealth and create employment for the people.
Dr Mangion said that the government also failed to utilise EU funds allocated to Malta. In fact, it only used €500,000, €3 million less than in the first two months of last year. In the same period, the country contributed around €10 million.
Moreover, published figures unearthed the shortcomings in the government’s arguments. For when presenting the last budget, the government had said that the 2008 deficit had increased because of the €56 million it had to fork out for the shipyards’ early retirement schemes.
But the official statistics showed that the government paid around €18 million for the scheme. The government played with figures to give the impression that it was reaching its aims when this was not the case. Dr Mangion said it would only continue to do so until it adopted an accrual accounting system, something it had been promising for the past 10 years.
Dr Mangion said that income from income tax dropped by 7.2 percent and this confirmed lower profits. Income from VAT also dropped, a confirmation of a drop in expenditure and consumption, in spite of the high inflation rate. This confirmed the country’s recession.
He said that in spite of a drop in capital expenditure, the national debt between February last year and the same month this year increased by nearly €350 million to €3.6 billion. Interest on debt also increased by €5.4 million, going up to €37 million in the first two months of this year.
The government, Dr Mangion said, should recognise the actual state of the economy and implement the promised capital investment programme to generate economic activity.
It was also essential that the government did not continue to boast about the funds allocated to Malta by the EU but utilise such funds in useful projects.
The government said it seemed that the Opposition had also forgotten that the world was going through an economic crisis which led a number of countries to recession and unemployment growth. Through its negative statements, the Opposition was showing it did not have serious policies for the country.
The Finance Ministry said that a package aimed at stimulating the economy had been announced in the budget, when the government had presented a programme which stimulated the economy, including investment on a number of years in sectors which had the biggest impact on jobs, quality of life, education, training, the environment and investment incentives.
Although financial sustainability remained a fundamental element because it ensured that the country remained capable of attracting foreign investment, the government had the priority to see what were the immediate needs of families with employment remaining the topmost priority. This was why specific work was being done in two sectors which were most affected by the international crisis - manufacture and tourism.
The government was meeting companies in difficulty and offering assistance, it increased the Malta Tourism Authority’s advertising budget and more low cost airlines would be operating new routes to Malta in the coming months.
This was together with the moratorium on bank loan interests for hotels and incentives in three star hotels to be announced in the coming days.
Through the government’s work, in spite of international difficulties, the country would be keeping a stable economy and attract more investment.
Lufthansa Technic would also be inaugurating an extension to its facilities increasing its workforce to 700.
The minister said that 7,000 new jobs were created in Malta last year. And in spite of the crisis, Malta still had one of the lowest unemployment rates in the EU.