Fenech hopes for MCESD agreement today

Parliamentary Secretary Tonio Fenech said yesterday that the European Commission's praise over the way the government was acting to contain the deficit was a positive signal for potential investors, confirming that their capital would be safe in Malta.

It also showed how right the PN was before the election when it promised that public finance would be on a sound footing.

Mr Fenech was concluding the debate at second reading stage on a bill to formally introduce the budget measures.

Mr Fenech said this was a budget which not only sought to tackle the deficit, but also improve the island's competitiveness and productivity.

In having proposed that public holidays falling on weekends would not be added to vacation leave, the government had, in practice, asked the workers to work half an hour more per week. The number of holidays in Malta was, after all, the highest in the EU.

But apart from the measures on workers' leave, the budget also included incentives to attract high value added factories to Malta and boost investment. But one could not ignore the fact that measures were needed to ensure that firms already in Malta remained competitive - lest their workers had 365 days of leave per year.

The decision on workers' holidays had not been taken abruptly but after more than four months of consultations before the budget and two weeks after. He was now pleased that the unions had at last agreed on a common proposal. It remained the government's wish for all the social partners to reach agreement on measures to raise productivity. It was therefore his hope that such agreement would be struck at today's meeting of the Malta Council for Economic and Social Development.

Reacting to opposition remarks, Mr Fenech observed that recurrent revenue was now surpassing recurrent expenditure, in contrast to the situation under the 1996 Labour government when borrowing was made just to keep up with recurrent spending.

It was unfair to blame the government for the deficit. The deficit had grown as the government invested in productive activities, such as on improvements of the infrastructure, without which the economy could not grow.

Mr Fenech said it was not true that the government would take a third of the value of inherited properties through succession duties, as had been claimed.

Nor was it true that the government intended to change the cost of living adjustment (COLA) mechanism.

Mr Fenech said he had heard no proposals on how the government should have tackled the rampant abuse in the use of kerosene. The government had been subsidising the price of kerosene which should have been used for heating, yet there were higher sales of kerosene in summer because that fuel was being mixed with diesel. Only 35 per cent of households used kerosene, of which only 37 per cent used it for heating. And it was worth noting that there still was a subsidy for low income families.

Concluding, Mr Fenech said the government had been responsible in its budget, taking measures which would position Malta to be able to overcome its problems and grab the opportunities that came before it. The government would remain open for further proposals to this end.

Earlier in the debate, Gozo Minister Giovanna Debono said the government was aware of Gozo's particular needs. As a result, Gozo had a funding package from the EU and the biggest capital funding allocation ever made for Gozo in the budget.

Among the projects currently in hand in Gozo was the Lm15m Mgarr terminal which would be completed next year. The Chambray project was back on track, though not without opposition from the MLP, the helicopter service was also being restored. Although prices would be higher, so too would standards, and the Spanish operator was prepared to revise the tariffs if that was possible. All should therefore work to make this service a success.

Several tourism-related projects were in the pipeline in Gozo, including the Lm100,000 upgrading of Ggantija, the training hotel and the decompression chamber for divers.

The country was being renewed responsibly and the results would be a modern, competitive country and a better quality of life for the people. But renewal demanded participation by everyone, with realisation of the measures needed for a better future.

Parliamentary Secretary Tony Abela said that the budget reflected the seriousness of the government, which did not want to deceive the people by saying that everything would be solved by depreciating the lira.

One of the measures which the government had introduced in the budget was the revision of the succession duty on inherited properties to do away with anomalies. Gone were the days when all inheritance would be charged at 35 per cent.

Referring to the social pact, Dr Abela said that the government had waited until the very last minute before presenting the budget to see whether an agreement could be reached. It was good to read that the unions had now reached some form of a counter-proposal on measures to raise productivity, which would be forwarded in today's MCSED meeting.

All this showed how this was not an arrogant government.

The budget had a strong accent on the environment but it was shameful that a consultation meeting at Marsascala about the waste recycling plant ended up with abuse being hurled at Minister George Pullicino.

The budget did not reflect only the needs of the country for 2005 but it also aimed to solve long term problems, such as the deficit.

The opposition was only paying lip service and could not bring itself to admit that not everything was negative. Admittedly, certain steps had to be taken to curb abuses, especially where the sale of kerosene was concerned. How could kerosene consumption in summer exceed that of winter? Through the measures taken, kerosene sales were already coming to normal levels.

Concluding, Dr Abela called on the opposition to forward constructive proposals, ensuring that taxes were paid by those who should pay them.

The bill was given a second reading after a division.