The government will keep its word and will not introduce new taxes, despite the intensifying Ukraine war, Finance Minister Clyde Caruana said on Friday.

"Introducing new taxes will backfire on the economy because it generates inflation," he told reporters during a Labour news conference.

"That is why we are dedicating €200 million to cover rising costs of gas and fuel till the end of year, so that we cushion the impact before it seeps into the economy."

Caruana also said Labour's electoral pledges are costed and programmed in accordance with the developing conflict.

"I have been following the conflict since before the invasion of Russia, and the measures we are announcing are structured to withstand the impact of the war," he said.

"The country to emerge the strongest from this conflict is the one that manages to stifle inflation the most, and that is our priority right now.

"Inflation could run through the economy and infect it, just like a virus infects a body."

Speaking during a debate by the Malta Chamber of Commerce on Thursday, Caruana said the Russian invasion of Ukraine has so far cost Malta €200 million, stressing that he is economically more worried about the war than he was about the COVID-19 pandemic.

Caruana explained that the €200 million is the cost borne for this year as a result of what happened this week, mainly due to fluctuations in the energy markets and the cost of oil which skyrocketed.

He explained that the sum will cover the rising costs of fuel, oil and gas before they hit the Maltese economy. Prices are skyrocketing after several countries stopped sourcing their energy supplies from Russia and Ukraine and are looking for alternative sources.

'We need someone who knows what I'm doing'

Caruana made it clear that the global economy is going through a war and Malta cannot gamble with its finance ministers right now.

"We are in a war and we need a finance minister who knows what I'm doing," he said.

"I have been in debates with multiple PN candidates, none of whom have a clear idea of how to run an economy. I still don't know who the PN finance spokesperson is and Mario de Marco is nowhere to be seen.

"I don't know who will be finance minister if PN is elected to government, but I sincerely hope it's none of the candidates I have been debating with so far."

Terms and conditions apply

 Caruana called the news conference together with Infrastructure Minister Ian Borg to warn voters about, what, according to them, are the Nationalist Party's 'terms and conditions'.

Borg ran a word count of the words in the PN manifesto that indicate that the proposals come with countless conditions.

"The word but appears 87 times, the word criteria 49 times, conform, 41 times. Subject to and so long as appear 60 times," he said.

"You never know where you stand with PN, because everything comes with a condition. In the end, PN will take away from you more than it will give you."

Borg said the PN is constantly amending and re-uploading new versions of their manifesto, all the while trying to hide its terms and conditions.

He referred to a PN pledge to slash taxes for companies that conform with ESG criteria. The EU, he noted, only requires companies with more than 500 employees to file such non-financial reports.

Caruana noted that just a handful of companies locally are currently in line with ESG criteria – and that the PN has been unable to explain, in detail, what companies will need to do to qualify for tax breaks. 

Caruana noted that the PN’s “tax credit” promises would totally leave out minimum wage earners – because people on the minimum wage do not pay tax and, therefore, cannot receive tax credits.

"A PN government will take away more than it gives to some workers, and take away everything for others," Caruana insisted.

"That's not how we run a country. For Labour, the sun rises for everyone," he said.

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