Issue link: https://maltatoday.uberflip.com/i/208710
24 Opinion maltatoday, SUNDAY, 10 NOVEMBER 2013 Stefano Mallia A budget with no rhyme or reason O ne idiom summarises the first Labour budget: on the whole it has some very important positive measures but it has no rhyme or reason. Many of the proposed measures are still in an exploratory stage. One commentator called them blank spaces that need attentive filling in. Several studies and whitepapers have been announced for delivery in the future. For this reason, the budget statement was not knitted together very well. Three writers were reported to have worked on it: the Prime Minister, his Deputy and the Minister of Finance – and it shows. It made me ask "What is the plot? Where does this budget fit in the grander scheme of things?" Frankly, after the prime minister raised expectations sky high by pre-announcing that the budget was going to surprise all and sundry, I expected something better, something that gives you a sense of direction. But let me skip to more important issues. It is perhaps a sign of political maturity that many of the measures launched by the previous government have been kept. I just hope that this seemingly positive continuity is not also a sign of a serious lack of new ideas. Whatever the case may be, it appears that what will likely drive the economy forward in the next few years are the policies and measures which the Nationalist Party led governments launched in the past. The other major influences will be the state of the EU economy and the situation in neighbouring Mediterranean states. Turning to a few other measures, the change in the top tax rate for those earning up to €60,000, concessions on the payment of VAT and tax concessions for parttime self-employed are positive. The reduction in the water and electricity rates to households will be helpful in some ways. The opening of free day care centres and tax concessions to those who pay for such services along with some other measures intended to encourage more women to seek employment are all moves in the right direction. Can anyone fault the increase Finance Minister Edward Scicluna holds the Budget briefcase in education expenditure and priorities set for this sector? But most of these measures require further investments and increase costs to the government. Some of these have been indicated in the Budget Estimates, others have not. One hopes that cost estimates have not been conservative. Otherwise government's fiscal sanitation plans are in danger. It is clear that the Commission, in its latest report, suspects this much. It is saying that neither has the previous government maintained spending within the prescribed limits nor will this one manage to do so. To say that the Commission issued this report without seeing the actual budget does not hold water. Let's not forget that government was obliged to submit its proposed budget well before actually presenting it to the Maltese public last Monday. This is worrying. At the start of his speech, the Minister said that in March, the people had voted to pull Malta out of the bottomless pit of debt and deficits. Then he coolly announced that next year, government was going to borrow an additional €650 million. The decrease in the electricity and water tariffs will also increase consumption of both commodities, perhaps waste as well Many of the incentives of this budget can work only if flanking action is taken. For example, job openings for women also need to be created if the incentives to encourage them to enter the labour market are to serve for any purpose. The side effects of some measures need to be watched. The decrease in the electricity and water tariffs will also increase consumption of both commodities, perhaps waste as well. This measure can also act as a disincentive to change to alternative energy sources. In this regard the lack of any kind of funds for the installation of PV panels is also telling. We certainly do not want this to happen. Even the increases in car licenses and excise duties on fuel could have been more gingerly handled. They could have been justified in terms of their positive impact on the environment. Strange that they were not. Stranger still is the reduction in registration fees of second-hand non-EU cars. Strange and stranger still is the handling of Air Malta. I am still astounded with the one paragraph dedicated to this vital link in the tourism value-chain. Government has brazenly declared that it is holding the present management responsible for the delivery of results. Hardly a budget measure. Who will we hold responsible if Air Malta goes down? The government, of course. The PL has been elected to govern and manage the country and not to shift responsibility onto others. Who started the malaise within the company interests me little. What the economy needs is a solid sustainable recovery and not engagement in a blame game. But maybe a plan B is already in place. The cherry on the cake is of course the scheme to sell citizenship to foreigners. A scheme that carries with it no obligation to invest or create jobs in Malta. A scheme that carries with it considerable risk of damage to our reputation. It begs the question why the projected €15 million which the government plans to net from the scheme would make such a difference to an expenditure outlay of around €4 billion. Why all the secrecy? Why can the minister overrule the consultants who carry out the 'due diligence' test? Strange. Strange indeed. Stefano Mallia is a Nationalist candidate in the forthcoming European Parliamentary elections VACANCIES WITH MEDIATODAY Full-time and part-time sales executives MediaToday is an independent publishing house. 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