Minister for Finance points to the need to increase productivity

Minister for Finance Edward Scicluna said that the budget for 2014 is planned to maintain continuity, building on what was strong and pruning the weaknesses. Speaking at a pre-budget consultaion meeting, Minister Scicluna said that Malta had seen economic growth ranging from 8% per annum in the 1990’s and 1-2% after 2000. Currently, the minister said that the rate of economic growth is not meeting expectations. He said that any growth below the 4% mark does not meet the standard of living Malta requires to be at par with the EU. He said that the projected rate of growth will be 1.6% which will go up to 3.8% when inflation is factored in. The EU and the International Monetary Fund feel that this will be lower. Prof Scicluna said that the employment situation will remain relatively steady. He said that the level of productivity is low as is the rate of consumption which will affect the GDP. He said that investment needs to grow to boost the GDP. Minister Scicluna said that government’s income has fallen by 2%, underlining that some EU funds were not spent and there is little chance that the monies can be disbursed now. Minister Scicluna said that government managed to spend €90 million less but fiscal slippage grew from 2.2% to 3.3% in 2012. The lowering of the deficit to 2.7% can be reached said Minister Scicluna and if target is reached before time, the target will be re-defined to a lower bar. He said that government does not wish to further inflate the public sector The minister maintained that until August, Government was on track against projections on revenue. He said that Auditor General Anthony Mifsud is assuming a temporary role as independent budget auditor. He said that this budget is being compiled in the same manner as previous budgets but insisted that reforms are necessary.