Issue link: https://maltatoday.uberflip.com/i/885114
maltatoday, TUESDAY, 10 OCTOBER 2017 15 Budget 2018 Labour Party Press Conference PRIME Minister Joseph Muscat has hailed the budget for 2018 as one that repaid people for their faith in the government. "It is all part of the strategy we started in 2013 when we set off trying to fix things that needed to be fixed in the economy and which has now led us to a situ- ation where we can work for today as well as for the future," said the Prime Minister as he addressed a press conference at Castille shortly after Finance Minister Edward Scicluna delivered this year's budget speech. Muscat insisted that the budget was also an answer to all those who had questioned where the surplus was going, emphasising the fact that for the first time in recent history, the budget included no new taxes. Turning to social housing, Muscat said the government would be using innovative schemes that will see the coun- try make its biggest ever invest- ment in the sector. With the country's traffic situation seemingly getting worse every day, Muscat said that as of next year, those aged between 16 and 20 would be benefitting from the use of free public transport, while the gov- ernment would also be work- ing on having a system of free school transport for children attending all of Malta's schools, including church and private schools. This in addition to the "larg- est ever capital investment" made in Malta, that will see a newly-set up agency administer the budget for the maintenance and construction of new roads, which has also doubled. The government recently said it intended to implement a cut- off date, by which point it hopes to have stopped the sale of non- electric vehicles. Muscat said the government's measure not to charge registration tax and road tax, for a period of three years, would contribute to- wards this end. In order to help the country retain its talent and to continue to develop new economic sec- tors, Muscat said the govern- ment would be offering tax ex- emptions to those completing a Masters or PhD, as long as they lived and worked in Malta for a period of three years. "This is why we are prepar- ing for the future, because the challenges we are facing we can face because of the strategy we have implemented over the past four years," said Muscat, adding that the government was look- ing forward in a planned and targeted manner and not a spo- radic one. The Prime Minister said that with a surplus expected once again next year, the nation's debt will continue to decrease. Finance Minister Edward Sci- cluna said that the budget was a responsible one, insisting that the government had an obliga- tion to ensure the country was not living beyond its means. "That is the secret to obtaining a surplus and reducing debt." He said he was happy to be able to prepare budgets with many innovative measures, adding that through such measures, the government had shown that it understood the country's long-term problems and had committed itself to dealing with them in a con- structive manner. According to the Financial Es- timates for 2018 issued by the fi- nance ministry, the government's consolidated fund – which regis- tered an €8 million surplus in 2016 and showed a €31 million surplus in August this year – is expected to show a €29 million and €21 million deficit in 2017 and 2018 respectively. Asked by this newspaper how this could be explained, Sciclu- na pointed out that the estimate was based on an econometric model that had also predicted a deficit in 2016. "The forecast is calculated us- ing a model, so we were fore- casting a deficit for this year, same as we were last year," he said, adding that the last year's surplus had now been added to model. Scicluna went on to explain that the income being generated by the government was not due to it charging high- er taxes, or increasing other rates. "We see an increase from every source, both in direct and indirect taxes." "In other words, we are beat- ing the system," Muscat chimed in. "In reality, we are in an eco- nomic situation we have never had before and the model is built on the experiences of the past, where we had situations where the economy wasn't working in this way." As a result, he said that the model still made certain as- sumptions that led to it predict- ing a deficit. He said that the government had "completely changed the landscape" in- sisting the model would soon "catch up to the new reality". "When you put money in the Maltese economy, or rather, when you give people the op- portunity to work, they give you back a lot more than you expect," he said. Muscat: A budget to repay people for their faith in the government