For better or for worse, parliament will now be locked in the budget debate and both sides of the House have already started the run-in to the imminent referendum campaign.

Politicians will now be seized by a high fever that will progressively intensify. Objectivity is likely to take fright and stampede.

In due course, things will calm down and, whatever the outcome, we will have to come to terms with reality.

When we come round to pick up the pieces, we will all have to face up to the following unpalatable truths:

a) Malta continues to labour under a structural deficit which Finance Minister John Dalli could not shake off. When he first moved into his ministry in 1992, the deficit ran up to Lm28 million after his first full year in the cockpit. This year, it has officially added up to Lm78 million and would have reached a substantially higher level if one-time proceeds from the sale of public assets were not considered as ordinary revenue.

The EU Commission's latest fiscal surveillance report on Malta has expressed doubts as to whether Malta can achieve its planned fiscal deficit targets.

b) By persisting on spending well in excess of revenue, the national debt burden has snowballed from Lm245 million in 1992, to Lm1,035 million-plus in additional debt, incurred by public corporations and entities, all of which is guaranteed by the government.

Over time, the national debt is the barometer which measures whether the economy is sinking or not. Last year, Mr Dalli forecast that the national debt was to be reduced from Lm1,038 million to Lm959 million with further reductions in subsequent years.

This scenario has been turned upside down without much ado and the national debt is now expected to continue to pile up at least up to the year 2004!

Extraordinary as it may seem, Mr Dalli did not make a single comment on the national debt problem (which is largely of his own making) in this year's budget speech.

c) Debt servicing costs have now reached a level in excess of Lm65 million per annum and are well in excess of the annual proceeds realised by the government from the sale of public assets.

This vicious circle is as remorseless as it is unforgiving. When Mr Dalli took over the finance ministry in 1992, he outlined a detailed plan to help remedy matters. That plan did not come to fruition. Plans to reduce public expenditure were honoured only in the breach and never implemented.

Reducing the cost of the government is a tall order. But costs could have been controlled given prudence and frugality and if cost overruns were properly held in check.

On the other hand, costs could be far less burdensome if buoyancy could be restored to the economy. Buoyancy comes form greater productivity and higher earnings. It comes from better management.

In a nutshell, Malta has got to recover from a trauma of sustained squandermania and change course. It has to find a star by which to navigate. It has to summon its spirit of enterprise.

By the end of World War Two, with the island's economy devastated and much of its buildings in ruins, the first steps were taken in the direction of diversification from a fortress economy, as Britain began to shed its military responsibilities.

The challenge was awesome. The naval dockyard was to be commercialised, an industrialisation drive began to take shape. The tourist industry had to be developed. Overseas markets had to be sought. Progress was slow but it gathered pace with the attainment of independence in 1964. Business, as well as the workforce, had to be incentivised and foreign investment enticed.

The prevailing basic philosophy, once progress began to gather pace, was the belief that enterprise works best from the bottom upwards and that it must have the widest possible popular base.

Nothing strengthens democracy more than dynamic and broadly shared growth. The basis of success is the creation of new wealth which could be distributed equitably and not a policy that concentrates on the distribution of the current store of wealth.

By upgrading the infrastructure, offering the right incentives and relying on professional expertise, Malta started to look at a panorama of new opportunities beyond its shores.

An outward-looking, upwardly mobile generation with its own social and economic aspirations emerged to give a new lease of life to the services sector where new foreign income started to be earned from transhipment, ship registration, yachting activities, tourism, foreign language teaching, timeshare services, offshore activities, various other financial services and high-yield permanent settlers.

While the going was good, the economy grew. As new wealth was created, part of it flowed to consumers who stimulated more economic activity.

By the mid-'90s, the trend was reversed. Mr Dalli started to cream off at a rapid rate much of the money that had earlier started to flow to the consumers. Suffice it to say, that ordinary revenue has been stepped up from Lm504 million at the end of 1997, to Lm746 million by the end of this year.

This has taken the wind out of the sails of local enterprise and the economy lost its momentum. The budget for next year does nothing to inject new vigour and to stimulate new growth.

Malta's vocation and natural role is that of a regional hub, serving and trading with countries on the Mediterranean rim and beyond.

This is a role that could conceivably be effectively played to maximum advantage if Malta establishes itself in the vanguard of telecommunications technology. Development of this sort must be promoted in the context of a fertile economic environment.

We have yet to complete the switch-over from a fortress to an economic spearhead, thereby turning our sword into a ploughshare. This involves a process that has to go on, by taking new initiatives, by taking risks, by mobilising available resources, by motivating the players in the game, by taking advantage of our own assets and characteristics.

To succeed, Malta will have to stretch its people's imagination to the utmost and to summon all its domestic resources of enterprise and entrepreneurship.

Above all, it must make every effort to stimulate the venerable virtues including thrift and a propensity to save, good planning and hard work.

Malta must be its own master and be quick on the draw if it is to maximise its own opportunities.