Pensions reform law by year's end - PM

The government intends to present legislation on pensions reform before the end of the year, Prime Minister Lawrence Gonzi said yesterday.

Replying to questions during his monthly media briefing at the Auberge de Castille, the Prime Minister said that he was presented with the final report by the Pensions Reform Working Group two days ago. The report included all the reactions by the public and organisations following publication of the White Paper.

As a result of the reactions and suggestions made, the group had amended some of its original proposals, Dr Gonzi said. The ultimate aim, however, is that the country would have an adequate, sustainable pensions system well into the future.

Dr Gonzi said another report he would be reading this weekend was that on government spending on medicines.

He said a group was set up a few months ago to analyse the situation and their exercise was concluded in the past weeks. It was found that while the prices of some medicines had gone up, that of others went down but total outlay increased due to growing consumption.

The government, he said, had a duty to provide good quality medicines through a system that was sustainable. It would be exploring alternatives to see if medicines could be bought more cheaply and the necessary decisions would be taken soon.

Asked whether the water and electricity surcharge was to be raised in view of the hike in oil prices, Dr Gonzi said the government was analysing the situation and decisions would be taken in the coming weeks.

Security for November's Commonwealth Heads of Government Meeting (CHOGM) in Malta, was being discussed by the forces concerned. There were also ongoing contacts with other governments for assistance and expertise.

The country had to gear itself for possible eventualities the likes of which it has never seen before.

CHOGM would be one of the biggest meetings, if not the biggest ever, to be held in Malta with more than 50 heads of state meeting here.

The occasion was a golden opportunity to promote Malta to the world and the government wanted the meeting to be successful and well organised.

He took the opportunity to again express solidarity with the UK government and the people of London following last week's bombing.

Dr Gonzi said it was striking that the attacks came exactly when the countries with the strongest economies were meeting to discuss how to address poverty in the poorest states.

The timing, he said, exposed the falsity of those who pretended that they had a message to give through such attacks.

Poverty, the Prime Minister said, was the cause of illegal migration - a big problem for Malta.

By July, the number of illegal immigrant arrivals had already surpassed those of 2002, which was Malta's worst year.

Dr Gonzi said the government would continue pushing for assistance at a European level. There was a lot that could be done and, for the first time, the EU was recognising the problem and providing €1 million to assist countries affected by it. Even though this was a nominal amount, funds for the problem were being allocated for the first time and this was a big step forward.

Dr Gonzi said that during the forthcoming visit to Malta by the EU Commissioner for Justice, Freedom and Security, Franco Frattini, the government would continue pushing for a solution.

Malta would also bring up the issue of illegal migration at the CHOGM since poverty was causing the movement of millions of people who risked their life in search of a better one.

He said that a meeting of the most affected countries but also including Libya was being planned and Malta had offered to host it. The government will await developments.

Dr Gonzi said that it was worrying that certain sectors in Malta were reacting to illegal migration in a racist manner, as if immigrants should be considered as objects, rather than people.

While he was aware of the problems caused by illegal immigration, solutions which respected human life should be sought, and he condemned every form of racism.

Asked about the Franco Depasquale inquiry into the incidents between soldiers and immigrants at Safi Barracks last January, Dr Gonzi said the process was continuing steadily, although he had no indication as to what stage it had reached.

Asked about a number of Indians who were found working at Mater Dei Hospital and receiving Lm2 a week, Dr Gonzi said the incident was reported to the Director of Labour and the employer had been made to give the workers all arrears according to the contract.

On the recently declared fishing zones by Libya and Tunisia, the Prime Minister said the Cabinet had decided that Malta should likewise declare its own zone and that is what it would do. He refused to say how far out Malta's zone would be but said diplomatic contacts with Libya and Tunisia were continuing for the best solutions to be reached for Maltese fishermen.

At face value, he said, the decisions by Libya and Tunisia would affect Maltese fishermen, so Malta had the duty to declare its own zone and see how best it could be protected.

On the golf course, Dr Gonzi said that the space at Ghajn Tuffieha recently indicated for a golf course was much bigger than that to be taken up by a golf course itself. It was hoped that part of it would be developed for public enjoyment.

The Prime Minister said that, apart from a golf course, Gozo needed more conference tourism facilities. The helicopter service had proved to be very successful, despite criticism.

Before he took questions Dr Gonzi made a statement about the economy, pointing out that a strong improvement in economic performance was registered in real estate, renting and business activities; construction; transport, storage and communication; and the wholesale and retail trade.

A decline, he said, was registered in the gross value added of electricity, gas and water supply, as well as in the manufacturing sector.

Inflation in May was 2.4 per cent, compared to an average of 1.9 per cent, in the EU.

Dr Gonzi said that, however, this was not so preoccupying since it was partly explained by the 17 per cent surcharge on power and the eco-contribution.

But there were indications that other factors had to be controlled. For example, certain products, the cost of which should have gone down, had remained artificially high.

The Prime Minister said that the number of jobless had dropped by 12 per cent in May compared to the same month last year. There were further drops in June and July.

Total government expenditure for January to May amounted to 40.7 per cent of the budgeted forecast for the year. But revenue from income tax, VAT and social security contributions only amounted to 31 per cent of what the government had estimated it would receive by the end of the year.

However, he said, there were no worrying signs since an analysis showed that this was mainly because of cash flow priorities.