Malta’s deficit trends are worrying – AD

In a press conference in St. Julian’s, AD Chairperson Michael Briguglio criticised Government’s unsustainable financial targets and regressive fiscal policies. Briguglio said that AD has the most progressive fiscal policy.

“Latest NSO figures, for 11 months to November 2012, show that Government’s deficit was Euro 64 million higher than the relative 2011 figure. Yet the Government predicted that by end of 2012, Malta will be Euro 40 million better than in 2011, which means that, if revenue levels are similar to that of 2011,  a net improvement of Euro 104 million is required  for December 2012”.

“The 2013 budget is planning an €83 million revenue increase, from €840 million in 2012 to €923 million in 2013, when the same budget is proposing an income tax cut for those earning between €19,500 and €60,000, down from 35 per cent to 32 per cent in 2013 and to 25 per cent in 2015. For such an increase in revenue to take place, the economy must grow at a rate that goes beyond recent trends and which is beyond belief given the global economic crisis”.

“Should such tax cuts be approved, we will subsequently be likely to have to pay up for their impact on public finance through a reduction of public services, more borrowing or compensating tax elsewhere. The proposed tax reduction in the budget also lacks a social justice dimension. Indeed, deductions are regressive as they are not benefiting the vast majority of workers who earn less than €19,500, and they are taxing minimum wage earners who are single.”

“On the contrary, AD believes in a progressive income tax system, based on the ethical consideration that those who can contribute proportionally will do so. AD supports schemes that keep VAT rates low on products and services that account for a high proportion of expenditure by low-income earners.  Property speculation should be taxed from third vacant property onwards, particularly when Malta is a perpetual building site and when a quarter of properties are vacant”.

“AD believes that the minimum wage in Malta should increase and should be extended to  part time and contractual workers. Disability  pensions and pensions for the elderly should ensure a decent standard of living”.