Issue link: https://maltatoday.uberflip.com/i/1419860
9 maltatoday | SUNDAY • 17 OCTOBER 2021 INTERVIEW bills, and fuel costs, will not in- crease at the beginning of next year? Yes. Pensions. At the beginning of your budget speech, you turned towards the Opposition and said: 'We will not increase pen- sions by €5 [a week]; or by €10; but by more.' Yet the actual in- crease that all pensioners will benefit from, amounts to €5. Can you explain where those other €10 come in, exactly? Over and above the €5 increase for all pensioners, there is also the supplementary allowance, and widows' pensions. Let's start with the widows. There will be some who – adding up the general €5 increase, the supplementary allowance, and the revision of their pension - will benefit from no less than a €15 weekly increase: in other words, €780 a year. When it comes to the supple- mentary allowance: in the case of married couples, it goes up to no less than €6.5 a week. So those who receive a pension of not more than around €7,800 a year, will get a weekly increase of €6.50. Added to the €5, it works out at €11.50. As for singles who are also in the €7,800 pension bracket: they will benefit from a supplemen- tary allowance of €5, on top of the general €5 increase. In other words: €10 a week. So across the board, it works out as either over €10; or exactly €10... How long will pensions remain sustainable, though? Will to- day's children receive a pension in future? And can government continue to increase pensions indefinitely, to keep apace of a constantly rising cost of living? The issue of pensions, in this country, requires a discussion that goes far beyond the budget. Ours is the only country in the EU to have a pension system based only on the so-called First Pillar: 'Pay As You Go', which means that today's workers pay National Insurance to finance the pensions of those who are retir- ing… today. In all other EU member states, however, there is also a 'savings' mechanism, whereby people pay a higher amount in National In- surance; and the additional mon- ey is invested in a fund, specifi- cally so that those workers can benefit from an additional pen- sion when they retire. This, however, means that there has to be a discussion, with all the social partners, to determine the best way forward. As for the sustainability of pen- sions: with the model we have at present, that depends entirely on the job market. The more wealth is created by the job market, the more tax revenue for govern- ment; and the more revenue for government, the more money is available to sustain pensions. But if we're going to talk about the adequacy of pensions – whether they are enough for pen- sioners to actually cope – that's a whole different question. This, too, is why we need to discuss the introduction of additional pillars in future. You also announced 'free transport for all Maltese and Gozitans, from October next year'. First of all: why October next year? Why not in January 2022? And did you consult with MPT; the Spanish company [Au- tobuses de Leon] responsible for public transport, which will lose a huge part of its revenue as a result of this measure? The company's revenue will come directly from government, which will be compensating for all losses arising from tick- et-sales. But yes, I did talk to them. And we're starting from October 2022, to give the com- pany enough time, and breathing space, to plan for the expected in- flux of more people using public transport. It made no sense to start from January, as there would be a risk of mismanagement, or over-crowd- ing, that would give rise to justifi- able complaints from the public. We felt we needed more time, to plan for the transition properly. How much will this measure cost government? For next year, we are looking at a cost of €4 million by the last quarter. By the end of 2023 – tak- ing all costs and expenses into consideration - this is expected to increase to around E16milion… As Finance Minister you have repeatedly stated that you do not believe in austerity meas- ures. But aren't you going too far in the opposite direction? Government will now be mak- ing good for that private com- pany's losses… on top of a host of other generous benefits. Where is all this money going to come from? And will this budget be followed up by an- other next year, which imposes taxes to compensate for all this expenditure? No. I have no intention of rais- ing taxes; and nor do I want to drive the country's finances into a brick wall… as certain other people did, and ended up facing Excessive Deficit Procedures. Let me explain why. To start with, the most important thing is diligence [għaqal]. I think that we gave a clear signal yesterday, that we will be collecting all the taxes that need to be collected. And I am already informed that – on the very next day – a number of people who owe unpaid taxes, turned up at the [Revenue De- partment] to begin signing repay- ment agreements. That, in itself, will give a boost to government finances. Apart from that, there are two other factors that will help us keep the deficit under control. Primarily, economic growth: and for next year, we are looking at a projected 6.5% increase. This will translate into higher government revenue. But we also have to look at gov- ernment spending, and ensure that it is carried out with pru- dence. Putting all those things into the same basket: yes, it was precisely because of this that we are able to aim for a deficit reduc- tion from the 11.1% we will reg- ister this year, to 5.6% next year. But with the proviso that: if the impact of fuel or energy prices is too high, we will compensate for it ourselves; and therefore, the deficit may also grow by 1.4%. According to our latest survey, the state of the environment is now the third highest con- cern for the Maltese public. It is also an area where the gov- ernment's approval ratings are particularly low. Can you mention three measures, in- troduced by this budget, that might reassure all those people who are genuinely concerned by the environmental degrada- tion of this country, under your government? The first I would mention is the measure to address the issue of neglected properties in Urban Conservation Areas. To be sur- rounded by renovated buildings, in the traditional Maltese style we are used to, is also an environ- mental concern. This measure will help to beautify the visual impact of our village cores. Secondly, we will soon be start- ing the process to create the so- called 'Buskett of the south of Malta': which will transform the coastal area known as 'Imnadar' – an enormous stretch of land, from Xgħajra to Żonqor Point – into a marvellous public park. Apart from that, we are seeing to it that there will be new pub- lic gardens, and green spaces, in several different localities: as I mentioned in [Monday's] budget speech. So I think that this budget is the first sign – although we hav- en't got there yet; and we are still far away from reaching out tar- get – but it was the first of many signals, that this administration knows what it has to do: so that, just as we have absolute credibili- ty when it comes to employment, the economy, and managing the country's finances… now, we will have a fourth credibility pillar: that of the environment.