Editorial

On Friday Parliamentary Secretary Tonio Fenech let it be known that the government will be presenting its Budget for 2008 in mid-October. Mr Fenech referred to the date while formally presenting the pre-Budget document, "Families Growing Stronger", to the social partners at a meeting of the Malta Council for Economic and Social Development held at the Auberge de Castille.

The date - roughly in keeping with last year's Budget Day, which was October 18 - may or may not confirm the expectations of some that the general election would be held this year. Certainly it would make no sense for the election to be held before the presentation of the Budget; indeed, there are various indications to suggest that the election would be held in the spring of 2008.

The pre-Budget document is the result of a long series of public consultations over 32 weeks, in which some 2,000 people participated in public dialogue meetings at Castille, while some 10,000 others gave their feedback in one way or another. The document contains around 200 proposals - dealing with work, pensions, education, the environment, health, Gozo, youth, sport, culture, towns and villages, tourism, financial services, science and technology - with a common underlying theme: strengthening the Maltese family, the essential pillar of our society.

The proposals are intended to bring about the realisation of the government's objective to make Malta, by 2015, a regional centre of quality in health, tourism, manufacturing industry, financial services and education.

Most of the proposals look attractive enough and have elicited generally positive feedback from the constituted bodies. Obviously, putting them into practice has to square off with the country's financial resources and Government's determination to keep its deficit in check. Indeed, one of the Gonzi administration's outstanding achievements has been to bring Government's finances under control and to ensure that all the economic criteria (deficit, public debt, inflation and unemployment) were fully met in order to qualify for membership of the Eurozone. That the mission has been accomplished by the target date is a feat that cannot be underestimated.

Therefore any Budget measures which involve higher expenditure can only be realised in the context of higher government revenue and a consistently growing economy. The latter depends on a number of extraneous factors on which Malta has no control, such as the international price of oil, and the state of the economy in Malta's export markets.

Then again, it is also a question of priorities. Take pension reform, which is essential if one is to tackle the welfare gap. Government has now raised the retirement age, over the next 20 years, to 65. The maximum pensionable income is also being raised gradually from the present Lm6,750 to Lm9,000. But the introduction of the (mandatory) second pillar and the (voluntary) third pillar of the reformed pension system has to wait. Clearly, a culture change regarding savings is needed here: ensuring a viable pension system, after all, means ensuring adequate pensions.

Numerous proposals have been made to improve the quality of life, not only of families, but also of all citizens. Families should be helped through more generous fiscal measures, while young couples starting a family rightly expect an easing of the financial burden. The idea of subsidising home loans, for example, should be carried forward. It is also good to provide more day care centres to encourage more mothers to go out to work; on the other hand, stay-at-home mothers with small children should not be penalised.

The pre-Budget document does not seem to address a long-standing injustice: the freezing of rents on old property to 1939 levels and the near-total immunity enjoyed by tenants, who also have the right to pass on the tenancy, at the same rent, to their children or even to other third parties. One expects that this glaring anomaly - which also affects owners of old commercial property - is finally addressed in the first decade of the 21st century. Meaningful rent reform (which does not involve the government in any additional expenditure) would also eliminate a huge distortion in the property market and make more property available for rent, and thus to young couples.

Having said that, there is a lot to digest in the document - such as continued emphasis on the health sector, and the need for preventive care, to give but one example - and it would not be realistic to expect every single proposal to make it to the 2008 Budget, but it makes a good roadmap to reach the ambitious target which Government has set for Malta by 2015.