During the last legislature we have transformed the planning of the annual budget into a year-round consultation process. With the first consultation meetings starting way back in April, more and more stakeholders from the different facets of Maltese society had the opportunity to identify, promote and discuss their ideas in relationship to the direction that the Maltese economy and, hence, the government's priorities, should take.

This year's pre-budget consultation document is being presented in a period of significant international uncertainty. The unprecedented rise in the price of oil is more and more sounding like cliché, a news event that we all seem to be getting used to but, possibly. at times fooling ourselves into hoping that it can pass by us rather than over us. Just a few months ago, at, $100 a barrel, fuel was thought to have reached the highest price that could be expected before it stabilises itself. Today predictions that it could hit $200 a barrel by the end of the year are becoming sadly more realistic.

Equally worrying are the increasing international food prices, the continued instability in the financial markets and word of a possible recession in the United States.

One would therefore need to affirm from the outset that, in formulating the budget for 2009, we cannot not take adequate consideration of the realities around us and of the impact these are already having on our economy, on each one of us and on those least able to withstand these pressures.

On the other hand, both on the international front and locally, the economies are continuing to grow, which may answer the question why the increase in price of oil will not relent.

In the first quarter of this year, our economy grew by 3.5 per cent while indications from the main economic sectors still augur a positive rate of about three per cent. Unemployment has dropped from five per cent to 4.3 per cent, tourism is better, the gainfully occupied have increased by over 3,000 jobs and wholly generated by the private sector, public debt has gone down to 62.4 per cent of GDP in 2007 from 64.1 per cent in 2006 while government deficit has dropped to 1.8 per cent of GDP from 2.5 per cent in 2006.

The challenges we are facing are also posing significant pressures on the achievement of this year's budget target. We cannot however lose our focus on our ambition to achieve a balanced budget by the end of 2010. We need to sustain an economic strategy that guarantees stability and ensures sustainability. Surplus and sound finances are not simply slogans that attract votes during electoral campaigns. Rather, they send a strong message of confidence to investors, foreigners and local, that putting their money in Malta carries less risks and, therefore, increasing the opportunities of more and better job opportunities.

This year's budget theme, Together For A Sustainable Future, reflects the government's plans for the present legislature. Our aim is to seek further growth. We have no hesitancies in insisting that further economic growth is critical in our objective to achieve a better quality of life. Yet, economic growth requires growth in the quality of our education, health and environment. At the same time, we have the moral obligation not to endanger the future of the younger generation by acting responsibly, thinking about tomorrow when making today's decisions.

The pre-budget document touches upon a number of issues that the government sees central to the theme of sustainability. Addressing future energy needs is an important theme that is discussed in this year's document; we need to have specific actions that address energy conservation while creating more attractive incentives for those who wish to invest in alternative energy. The document therefore proposes a revision of the feed in tariff, the introduction of energy audits, energy efficiency information campaigns and the energy-saving lamps scheme. The reform in the car registration tax system seeks to provide incentives to lower fumes-emitting vehicles and cars that cause less congestion.

However, a sustainable future can only be attained if the economy continues to grow. We also need to work harder to make life easier for businesses, particularly small and micro enterprises, with a focus on the need for a Small Business Act and less regulatory costs and burdens. Yet, new opportunities create new jobs requiring specific sets of skills and we need to continue extending the educational opportunities offered to our children, with a specific target of reducing the number of early school leavers.

The document also focuses on other important aspects such as health, social welfare, the sustainability of our localities, with a focus also on Gozo. It looks at other important aspects such as ICT strategy, a review of Malta's transport policy and the needs of our infrastructure.

Throughout the next weeks, we will be discussing in further detail the specific areas outlined in the pre-budget document. However, for consultation to be effective, participation is required by all sectors of public life. Stakeholders, unions, political parties, other civil society organisations and private individuals are, thus, encouraged to go through the proposals outlined in this document and send us their opinions at budget2009@gov.mt. The document is available at www.budget2009.com.mt.

Mr Fenech is Minister of Finance, the Economy and Investment.

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