Issue link: https://maltatoday.uberflip.com/i/499233
maltatoday, WEDNESDAY, 22 APRIL 2015 8 MIRIAM DALLI MALTA has registered the low- est deficit recorded in the past 20 years, confirmed by both the Na- tional Statistics Office and Euro- stat, the EU's statistical office. Since 2012, when the deficit stood at 3.6%, Malta has been on the mend, reducing the deficit to 2.6% in 2013, 2.1% in 2014 and planning a further reduction to 1.6% this year. Flanked by deputy prime minister Louis Grech and finance minister Edward Scicluna, Prime Minister Joseph Muscat expressed satisfac- tion at the government's success in meeting financial targets set for 2014. "It is crucial to point out that there was scepticism around the budget presented for 2014, with a number of critics expressing doubts on the sustainability of the budget and the ambitious deficit targets," he said. Although Malta is now well be- low the 3% Maastricht criteria, the European Commission is still considering whether Malta should be pulled out of the excessive defi- cit procedure. Although Malta is meeting both deficit and debt rules, it is up to the Commission to determine the pulling out. "We are honouring our end of the deal, respecting the rules and the figures. Our target is to continue following the rules," Muscat said. The finance minister said the deficit target was met without kill- ing the economy, placing Malta as a model of growth-friendly con- solidation. "It is something I speak proudly of in meetings with euro finance ministers and we have shown that the deficit can be reduced in a sus- tainable way," he said. Scicluna said the €320 million Shanghai investment helped to ad- dress past debts while the money generated from revenue was in- vested in education and health among others. Louis Grech said Labour's elec- toral manifesto was being imple- mented according to a plan. "We registered economic growth with- out resorting to austerity meas- ures," he said. Muscat said the Labour admin- istration was advocating a cultural change whereby the public service was being managed as if it were a private company. "We will con- tinue on this path of discipline because, by necessity, we need to continue performing well, improv- ing on the headway we have made," he said. The Prime Minister said the re- duced deficit was achieved through an economic model – as opposed to an accounting exercise – based on incentivising economic growth and encouraging more people to join the workforce. He said, that while the govern- ment had looked at cuts in govern- ment spending, capital expendi- ture for 2014 amounted to €300 million. According to Grech, private con- sumption by end of 2015 is expect- ed to increase by 25%. News Malta records 'lowest deficit' in 20 years Prime Minister says deficit target was met while allowing the economy to grow and cutting taxes PN calls for extension of Enemalta's 'discriminatory' 50c solar roof lease TIM DIACONO THE Nationalist Party has described the government's lease of roof space for the development of solar panels, at an annual rate of 50c per square metre, as "discriminatory" and pro- posed that all Maltese businesses start benefitting from the same rates. "Maltese businesses should be leased land at the same rate that it has been leased to Shanghai Elec- tric Power," shadow energy minister Marthese Portelli told a press confer- ence, referring to the Chinese state- owned company that bought a third of Enemalta plc. When asked by MaltaToday wheth- er this proposal in itself could be considered discriminatory to non- Maltese companies who will not be able to benefit from these lower rates, Portelli said that she is "against all discrimination, but particularly that in favour of a foreign company". "The government should stop dis- criminating in favour of SEP and against Maltese companies, several of which already invest in renewable energy," she said. Portelli revealed a recent letter sent by the Malta Industrial Parks in- forming businesses that they could lease MIP roof space to install pho- tovoltaic panels at an annual rate of €3.35 per square metre. "This is also discriminatory, and we therefore propose that this rate gets adjusted to 50c to reflect the rate that has been offered to Enemalta," Por- telli said. "This way, we can ensure that Maltese businesses are given the same opportunities as foreign ones and aren't treated as lower class com- panies." She also demanded that the govern- ment instantly reveal detailed plans for new renewable energy schemes, such as insulation systems and en- ergy audits, that families will be able to benefit from. Opposition MP Robert Arrigo called on the government to revoke "400 new taxes that it had imposed on families and businesses in this year's Budget". "If the government is doing so well economically, then why did it intro- duce those taxes?" Arrigo, the PN's spokesperson for small business, questioned. Earlier this month, MaltaToday revealed that Enemalta was granted over 300,000 square metres of roof space for the development of solar panels at an annual rate of 50 cents per square metre, in a deed ham- mered out just two days before being incorporated into a public limited company. The government's incorporation of Enemalta as a public limited compa- ny paved the way for its eventual 33% acquisition by SEP for €320 million. Enemalta and SEP will now pay an annual €154,767 for the solar roof space. The GRTU small enterprises cham- ber, had earlier expressed disap- pointment at how the 310,000 square metres of roof space were leased to SEP instead of to local businesses for investment. Deficit in 2014 at €168.3 million MATTHEW VELLA GOVERNMENT deficit went down by €26.1 million in 2014 from €194.4 million recorded in 2013, equivalent to 2.1 per cent of GDP, down from 2.6 per cent for 2013. Government debt amounted to €5,417.4 million, an increase of €176.2 million from 2013 and stood at 68.0 per cent of GDP Adjustments were made to the balance of the consolidated fund, which amounted to a deficit of €121.3 million. The major positive adjustments included the treasury clearance fund (€35.9 million) and time-adjusted cash transactions (€13.5 million). On the other hand, the main negative adjustments were other accounts receivable and payable (€67.1 million), the equity injection to the national air carrier (€15.0 million), debt assumption (€5.8 million), the adjustment for stock premium proceeds (€4.8 million) and the difference between inter- est paid and interest accrued (€3.7 million). The deficit for 2013 was revised upwards by €7.6 million: of this amount, €7.3 million was related to updated data sources, mainly in other accounts receivable and pay- able and the availability of audited financial statements for both EBUs and Local Councils. Other chang- es had a positive impact of €0.3 million. A downward revision of €4.2 million was reported in 2011 due to updated data sources. As regards General Government debt, data for 2013 were revised up- wards by €0.3 million while 2011 and 2012 remained unchanged. In 2014, a positive stock f low ad- justment of 0.1 per cent of GDP meant that the debt increased more than implied by the deficit. This rise in debt was the result of lower utilisation of liquidity and higher holdings of currency and deposits. In 2014, the government deficit of both the euro area (EA19) and the EU28 decreased in absolute terms compared with 2013, while the government debt rose in both zones. In the euro area the gov- ernment deficit to GDP ratio de- creased from 2.9% in 2013 to 2.4% in 2014, and in the EU28 from 3.2% to 2.9%. In the euro area the government debt to GDP ratio in- creased from 90.9% at the end of 2013 to 91.9% at the end of 2014, and in the EU28 from 85.5% to 86.8%. In 2014, Denmark (+1.2%), Ger- many (+0.7%), Estonia and Lux- embourg (+0.6% each) registered a government surplus, and the lowest government deficits in per- centage of GDP were recorded in Lithuania (-0.7%), Latvia (-1.4%) and Romania (-1.5%). Twelve Mem- ber States had deficits higher than 3% of GDP: Cyprus (-8.8%), Spain (-5.8%), Croatia and the United Kingdom (both -5.7%), Slovenia (-4.9%), Portugal (-4.5%), Ireland (-4.1%), France (-4.0%), Greece (-3.5%), Belgium, Poland and Fin- land (all -3.2%). At the end of 2014, the low- est ratios of government debt to GDP were recorded in Estonia (10.6%), Luxembourg (23.6%), Bul- garia (27.6%), Romania (39.8%) and Latvia (40.0%). Sixteen Member States had government debt ra- tios higher than 60% of GDP, with the highest registered in Greece (177.1%), Italy (132.1%), Portugal (130.2 %), Ireland (109.7%), Cyprus (107.5%) and Belgium (106.5%). In 2014, government expenditure in the euro area was equivalent to 49.0% of GDP and government revenue to 46.6%. The figures for the EU28 were 48.1% and 45.2% respectively. In both zones, the government expenditure ratio de- creased between 2013 and 2014, while the government revenue ratio remained stable for the euro area and slightly decreased for the EU28. Satisfied: From left - Deputy Prime Minister Louis Grech, the Prime Minister and Finance Minister Edward Scicluna Marthese Portelli – discriminatory lease, and Robert Arrigo