The pre-budget document, published recently by the government, will have limited usefulness to those who are interested in analysing how the management of public finance will impact on the economy. The early date being set for the budget makes much of the discussion about the state of the economy an exercise in hazy number crunching. Growth figures and sectoral performances among others are being conditioned by provisionality to the extent that in major cases, the indications being supplied turn out to be either misleading or meaningless. The hardest data available usually covers just the first half of the year and even that, with reservations.

By the same token, data about government revenues and expenditures remain liable to extensive massaging. To complicate matters, claims are being made that government accounts are being also prepared on an accruals basis. To date, this claim - underwritten by Eurostat in Brussels - has never been clarified. So it is plausible to argue that data published with the budget in October about government payments and receipts can be largely "corrected" on a cash basis, because there is a full quarter of the year in which to manipulate the flow of cash. To which add the less than transparent application of accruals to further muddy the picture... Labour will undertake an audit of public finance, to be made by a private accounting firm, immediately it assumes government.

Indeed, the annual budget, and even more so the pre-budget document, cannot be taken as a reliable guide to government action. A classic instance this year has been privatisation. The Gonzi administration started by declaring there would be no privatisations this year, a promise that has been honoured in the breach.

A year ago, the pre-budget document meant to cover the budget for 2007 notably set out the parameters within which the government would propose to give relief on income tax. These parameters were blithely exceeded without any explanation given for why this was decided. Meanwhile, it emerged that the tax "relief" granted had much less of an impact on the spending power of families and enterprises than had been originally prospected. Why this was so is a question that the PM and finance minister has signally failed to address.

True to form, this year's pre-budget document is an extensive, longwinded shopping list of proposals carried over from previous years of non-delivery. Others, quite a number, were purloined from Labour's Plan for A New Beginning. Curiously, there are no indications regarding what costs to attach to the projects proposed, even though most have been on the table for almost a decade. Yet, the same PM and finance minister who launched the pre-budget document busily claimed in past months that the measures proposed by Labour, chief among which to reduce the utilities surcharge by half, were not costed and/or did not identify the source for their funding. What is sauce for the goose...

In the final analysis, the pre-budget document fails abysmally and is of restricted usefulness to decision makers, because it does not define a clear strategic direction for the immediate future. Clearly, our society is now operating in a pre-electoral, not a pre-budget mode. Budget 2008 is seen by most people as part of an election campaign that has already started. Within this context, one would have expected a clear focus on at least three main points of concern: Economic growth; the impact of the euro's introduction as of Janaury 1, 2008; and the state of government administration.

On the first point, while it is true that economic growth has picked up, the growth rates being registered are still much less than what we need to catch up with our EU partners. More worryingly, growth is being boosted by the strong performance of sectors which have limited trickle-down effect. While their success and impetus is more than welcome, we still need to engineer an equivalent boost for tourism, manufacturing and internal trade - all sectors which have widespread impact on the quality of life of families and consumers. The pre-budget document is oblivious of this priority.

Then there comes the introduction of the euro. The majority of the people believe it will have an inflationary impact. The government says no. Labour has criticised the lack of sufficient consumer protection in the management of the changeover process. The Gonzi administration disagrees.

The likelihood is that we will go the way of Slovenia, where bankers and bureaucrats were quick to claim a successful transition. However, price rises, real and "perceived" especially in services, started to accelerate as of the third to fourth month after the euro changeover. To that one must add the phenomenon, not captured in the official price data, by which prior to the changeover date, prices are "adjusted" to take account of the coming switch. It happened in Slovenia, it is happening in Malta.

The Gonzi administration remains in a state of denial: things are going swimmingly - that is all the government is prepared to concede. The 2008 budget should provide a clear direction regarding how to ensure that the euro switch attains full success, not just in logistical terms, but more importantly, in terms of preventing the changeover from boosting inflation recorded or "perceived", thereby dealing a further blow to the country's competitiveness.

Regarding a real "reform" of public administration, it might be futile to expect such an emphasis in the final budget of an administration which has been in the saddle for practically all of 20 years. Still, across the board comes the complaint that government, from the top down, is consistently failing to deliver. If there is a huge national priority, this is it.

Beyond the verbiage and repetitiveness of the pre-budgetary document, the damaging conclusion about it is that like so many other initiatives of the Gonzi administration, it fails to live up to its promise.

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