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Alternattiva Demokratika – the Green Party yesterday unveiled a series of recommendations for the upcoming budget in which it said Malta needed a comprehensive plan that will encourage a national effort to make Malta more competitive.
AD’s spokesperson on finances, the economy and tourism Edward Fenech, said the target dates for entry into the Euro by 2006 were not realistic and reducing the structural deficit below three per cent would end up “suffocating economic initiative in Malta and Gozo.”
AD are recommending that tax revenue should grow at a marginally less than forecasted rate of economic growth, without the introduction of new taxes on income or on economic initiative. “As a responsible party we are refraining from the political opportunism of calling for a wide tax reduction,” Fenech said.
Fenech said Government should exclude any extravagant and unjustified expenditure such as the proposal to have a new Parliament built on the old opera house site, instead proposing the ruin be converted to a public garden for use as an open air theatre.
Asked by MaltaToday about the current increase in oil prices and the effects on electricity and fuel prices, Fenech said any price increase should be mainly placed on fuel prices rather than electricity. AD Chairperson Harry Vassallo said such a measure would influence new consumer patterns on the consumption of fuel without creating any impact on businesses and households.
AD reiterated its recommendations on promoting alternative energy, proposing the setting-up of an energy auditing unit which would offer advice to businesses and households on the best way to reduce energy consumption and costs. AD said it disagreed with the privatisation of utility providers. “We support management restructuring in order to remove and reduce inefficiencies and waste in these companies.”
In the sector of Small and Medium Enterprises, Fenech said the Green Party was proposing that a reduced corporate tax rate should be applied for SMEs, which he described as a “powerhouse for economic growth and job creation.”
AD is calling on the government to consider a lower company tax rate which is customary in other EU countries. The government can make up for this drop in tax revenue by stepping up tax evasion measures on blatant abusers through a unit within the Inland Revenue Department which will be responsible to arrange a repayment programme over five years. Fenech also suggested the creation of a venture capital fund for SMEs to encourage entrepreneurship.
AD is basing its recommendations on a three-pronged strategy, namely promoting SMEs and encouraging their growth, improving tourism and its focus on product development, and improving Malta’s skills base through an investment in education. Fenech said the level of graduates when compared with those of the new Member States placed Malta far behind from achieving an adequate skills base.
Dr Harry Vassallo called on the Nationalist Party to assume political responsibility for the state of government finances:
“If our finances were in order, Government would have pumped more money into the economy to stimulate economic growth. Its fiscal immorality is the cause of the fragility of our economy. The Prime Minister is still telling us that the economy is doing well because people have saved another Lm100 million. The fact that people are saving rather than spending damages the economy as this means that less money is circulating. Our country needs a fresh start.”
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