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6 maltatoday | SUNDAY • 27 MARCH 2022 OPINION 2 maltatoday EXECUTIVE EDITOR KURT SANSONE ksansone@mediatoday.com.mt Letters to the Editor, MaltaToday, Vjal ir-Rihan, San Gwann SGN 9016 E-mail: dailynews@mediatoday.com.mt Letters must be concise, no pen names accepted, include full name and address maltatoday | SUNDAY • 30 NOVEMBER 2025 After the budget hubris, reality knocks on the door Editorial CLYDE Caruana told us there was "more to come" when delivering the budget last month as his colleagues around him banged on their desks in approval. In his usual self-confident style, the finance minister spoke triumphantly on the budget measures he was presenting. There was reason to be upbeat. Caruana deliv- ered a massive €160 million tax cut for parents that will be spread over three years, pension in- creases over and above the cost-of-living adjust- ment, a social benefits expenditure that will reach €2.6 billion next year, the retention of energy subsidies and €100 million in incentives for busi- nesses, among other measures—and all this while forecasting a deficit in 2026 that will go below the 3% EU threshold. Malta's fiscal trajectory, economic growth and debt ratio will continue to defy the odds in 2026. The headline figures suggest Malta will be among the best performing in the EU. Indeed, in the post-budget press conference, we were told that fiscal prudence meant that Malta could exit the excessive deficit procedure (EDP) earlier than expected. But after the hubris came reality knocking on the door. Indeed, there was 'more to come' and it was delivered a month later by the European Commission. In its opinion published last week as part of the European Semester Autumn Package, the com- mission said Malta's budget for 2026 risks being non-compliant with European Council recom- mendations to exit the EDP. Malta is not expected to meet the agreed ex- penditure threshold on one of two metrics used to assess fiscal compliance with EU rules. While Malta's net annual expenditure in 2026 is projected to increase by 4.6%, well within the maximum growth rate of 5.8% recommended by the council, it is expected to fall foul of expendi- ture levels determined in cumulative terms. Malta's net cumulative expenditure is project- ed by the commission to increase by 27% in 2026 when compared to 2023. This is above the max- imum cumulative growth rate of 20.4% recom- mended by the council. The commission said this slippage corresponds to a cumulative deviation of 1.5% of GDP, which is significantly above the 0.6% GDP threshold set for 2026. As a result, the commission warned that Malta's budgetary plan was "at risk of material non-com- pliance" and urged the government to take cor- rective measures within the coming year. In other words, Caruana needs to revisit his budget and identify expenditure cuts to get the country back on track of fiscal compliance. Fail- ure to do so could lead to heightened scrutiny by the commission on Malta's finances and as a con- sequence leave less room for autonomy. The last time the country faced a similar pre- dicament was in 2012, when the Nationalist gov- ernment had to find €40 million in spending cuts after it passed that year's budget. Admittedly, the circumstances back then were markedly different since Malta was experiencing sluggish economic growth, higher unemployment levels and had a debt-to-GDP ratio of more than 70% (it currently stands at 47.1% of GDP). Fiscal compliance rules required the Nationalist government to take heed of the European Commission's warning, resulting in budget cuts to several public authorities and government programmes. Fiscal prudence requires an approach that en- sures every euro that is due is collected and ex- penditure to be judicious. The commission's cau- tionary autumn note raises questions about the long-term sustainability of expenditure levels. We need to ask ourselves the uncomfortable questions. Are we sure that every euro budget- ed for government entities is being spent wisely? Do we have too many entities with overlapping functions and administrative costs that are un- necessarily multiplied? Is money being wasted on persons of trust, studies and reports the country does not need? Does it make sense to have univer- sal fuel subsidies? Is enough being done to curb abuse of social benefits? Is expenditure being di- rected to encourage a shift to a value-based econ- omy that pays better but is less labour intensive? Caruana does not have the same problems of his predecessor in 2012. The economy is grow- ing, unemployment is non-existent and Malta has a significant fiscal buffer as a result of the low debt-to-GDP ratio. The annual deficit is also under control but a course correction is required nonetheless. If Malta ignores the commission's warning it will only be doing so at its own peril. Taking timely action now will avoid having to take more drastic measures in the future. Maybe it's time for some sobriety after the desk-banging. Quote of the Week "Our locality has been raped through this horrible and ill- conceived development, with the blessing and authorisation of the Planning Commission." – Żabbar Mayor Jorge Grech after the Planning Authority approved a nursing home that will rise to five floors and tower above one of the locality's main squares despite objections from the local council. MaltaToday 10 years ago Boy, 3, hospitalised after Montekristo tiger lashes out 29 November 2015 A three-year-old boy was grievously injured when a tiger on a leash at the Montekristo Zoo lashed out at the child. The incident occurred yesterday at 4:30pm at the Mon• tekristo Estate's zoo, which is itself an unli- censed zoo that hashowever been allowed to operate. Police said the boy was with a 56-year-old man from Zabbar at the time of the incident. The boy was hospitalised, and certified to be suffering from grievous injuries but was not in danger of dying. An eyewitness, Ritienne Spiteri, was there with a friend were playing on the carousel while most parents were sit ting at the ca- fe opposite. The two tiger handlers came dose to thecafe where two women were tak- ing photos of the animal. The kids rushed to view the tiger... one child crossed over a passageway whereupon the tiger grabbed the child and appeared to have locked him in a hug. The handler started hittingthe tiger un- til the animal released the boy.'' Spiteci said that there was blood on the ground, and cleaners were called in to clean- up the scene. Police carried out interviews with witnesses and the two handlers who were monitoring the tiger. Jean Paul Sammut, the CEO of Montekristo Estate, which is owned by construction de- velopers Polidano Bros, expressed solidarity with the family." From preliminary investi- gations it transpires that the tiger was being walked by two handlers, and was lying on the floor at the point of incident. [...]